US mfr'g still contracting and read both ISM and S&P Global, though hopes for bottom/Job openings point to continued hiring slowdown

The December ISM manufacturing index rose to 47.4 from 46.7 and was a bit above the forecast of 47.1. It was October 2022 the last time it was 50 or above. New orders were down a touch to 47.1 and hasn’t seen a 50+ print since August 2022. Backlogs bounced 6 pts but to a still weak 45.3. Inventories fell .5 pt to 44.3 with customer inventories back below 50. Employment stayed in contraction at 48.1 but up 2.3 pts m/o/m. Export orders rose 3.9 pts to a hair below 50 at 49.9. Imports were little changed at 46.4. Supplier deliveries too were little changed with supply chains much more normalized. Prices paid fell 4.7 pts to 45.2 after rising by 4.8 pts last month.

While the headline print rose slightly, the breadth deteriorated further where just one industry saw growth and that was ‘primary metals.’ That compares with 3 in November while those seeing contraction totaled 16 vs 14 in the month before. The help to ‘primary metals’ was the end of the UAW strike as American auto companies started buying materials again. If you haven’t seen steel prices, they’ve been jumping to the highest levels since last May for hot rolled.

The bottom line according to ISM, “Demand remains soft” and “84% of manufacturing GDP contracted in December, up from 65% in November.” I’ll add and state again, there is a restocking cycle ahead at some point but that ‘point’ is not yet seen in the data. On inventories, ISM said “Overall, panelists’ companies continue to manage manufacturing inventory levels down, as companies prepare for fiscal year closure.”