US manufacturing rundown, pull forward evident/Look at job opening stats

The March ISM manufacturing index fell back under 50 to 49 after two months above and just below the estimate of 49.5. The internals were pretty interesting.

Assuming that the first two months of the year included a bunch of tariff front loading, the March aftermath had inventories rising to 53.4 from 49.9 and that’s the highest since September 2022. New orders touched 55.1 in January and stand at 45.2 in March. Combining the two I guess is the definition of ‘pull forward’ or maybe companies are not seeing the growth they anticipated as we entered the year. Ahead of the jobs data this week, the employment component fell to 44.7 from 47.6 and that’s the lowest since September.

Export orders also dropped back below 50 at 49.6 from 51.4 and prices paid jumped by 7 pts to 69.4 and that is the highest since June 2022. Supplier deliveries fell 1 pt but after rising by 3.6 pts last month. The higher this figure is, the slower the deliveries and vice versa.

Regarding inventories, ISM said “Manufacturing inventories expanded in March, as panelists’ companies continue to pull forward (advance) deliveries of materials in an attempt to minimize the financial impacts of potential tariffs.”

With new orders, ISM said “Orders continue to slow, as discussions about who will pay for potential tariff costs are the prime topic of negotiations between buyers and sellers.”

On the labor market, “Freezing and attrition were the primary tools used for the 2^nd straight month, in lieu of the more dramatic and costly layoff process.” There was just ONE industry of 18 surveyed that saw a rise in employment and that was in ‘primary metals’ and we can assume helped by the rise in prices.

Pushing prices paid higher was “driven by dramatic increases in steel and aluminum prices as a result of recently deployed tariffs. Corrugate, copper and plastic resins have all experienced price growth as companies move to minimize their exposure to foreign made goods, causing domestic prices to rise amid new demand.” 15 of 18 industries surveyed paid higher prices.