- ISM Manufacturing for October fell to 51.2 versus estimates of 53.0 and a reading of 52.9 in September.
- ISM Prices Paid for October fell to 47.0 versus estimates of 58.0 and a reading of 61.0 in September.
- Pending Home Sales for September fell 1.1% versus estimates of a .9% fall and an upwardly revised 4.5% rise in August.
BOTTOM LINE: Construction spending in the US fell unexpectedly in September as home building slowed further, Bloomberg reported. Private non-residential construction rose .1% and is up 19.2% form year ago levels. I expect construction to continue to moderate over the intermediate-term as the housing market works off inventories and commercial building slows to more average rates.
Manufacturing in the US slowed last month on decelerating auto production, Bloomberg reported. The Prices Paid Component dropped to the lowest level in four years. The Prices Paid Index, an indication of inflation in the manufacturing sector, has plunged 46.6% since April 2004. The price of a barrel of crude oil has dropped almost $22 since July as the mania for the commodity continues to unwind. A report from ADP Employer Services showed today that US companies added 128,000 jobs in October, enough to keep the unemployment rate at a historically low 4.6%. The new orders component of the index fell to 52.1 from 54.2 in September. The employment component of the index rose to 50.8 in October versus 49.4 in September. I expect manufacturing to rebound next quarter as auto production cutbacks subside.
Contracts to buy previously owned homes in the US declined in September, Bloomberg reported. Pending re-sales fell 5.9% in the Northeast, 1.3% in the South and .4% in the West. They rose 2.1% in the Midwest. The median home price is still over 50% higher over the last several years. I still believe housing is in the process of stabilizing at relatively high levels.
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