ISM mfr'g nearing 50, new orders get lift from maybe Zyn and AI?

US manufacturing in December remained in contraction according to the ISM but a bit less so at 49.3, just below the 50 breakeven. That is up from 48.4 in November and above the estimate of 48.2.

New orders rose for a 4^th straight month to 52.4 and above 50 for a 2^nd month. Just six of 18 sectors asked saw a pick up but that is up from 5 in November, 3 in October and 2 in September. Backlogs also improved to 45.9 which is the highest since March. Inventories were little changed at 48.4 but fell to a 5 month low for customer inventories at 46.7. Employment remained weak at 45.3 and under 50 for the 7^th consecutive month. Export orders got back to exactly 50, up 1.3 pts m/o/m. Supplier deliveries were also about dead on 50 at 50.1. Prices paid was up 2.2 pts m/o/m to 52.5.

On the rise in new orders, it all came from the food/beverage & tobacco products and the computer/electronic products group. I’m guessing Zyn is helping the former and AI the latter.

With employment in particular, ISM said “Respondents’ companies are continuing to reduce head counts through layoffs, attrition, and hiring freezes.”