US Mfr'g, some hopes for restocking but prices move higher again

Following the contraction seen in every single regional manufacturing survey, the national January ISM remained below 50 too but a bit less so as it ticked up to 49.1 from 47.1 and that was above the estimate of 47.2. It’s the 15^th straight month under 50.

The main factor for the m/o/m increase was the 5.5 pt rise in new orders to above 50 at 52.5 and with customer inventories falling to 43.7 from 48.1, the lowest since October 2022, just maybe we’ll get some restocking again. Inventories at the manufacturing level though was up by 2.3 pts but still well below 50 at 46.2. Another factor for the headline lift, and not for good reason, was the 2.1 pt rise in Supplier Deliveries (higher means more supply constraints) to 49.1, while still below 50 it’s the highest since September 2022. Maybe the first sign of the Red Sea troubles delaying the timing of some shipments. We’ll soon see but along with this, prices paid rose 7.7 pts m/o/m and is back above 50 at 52.9, the highest since April 2023. Of note here, 10 of 18 industries paid higher prices vs just 4 last month.

Other things were soft with backlogs down .6 pts to 44.7, export orders lower by 4.7 pts to 45.2 and employment down by .4 pts and below 50 for the 4^th straight month and for the 7^th month in the past 8.

In terms of breadth, 4 industries saw growth vs just 1 in December while 13 saw a contraction vs 16 last month.