ISM Manufacturing Slightly Above Estimates, Construction Below Estimates

- ISM Manufacturing for February fell to 48.3 versus estimates of 48.0 and 50.7 in January.

- ISM Prices Paid for February fell to 75.5 versus estimates of 73.5 and 76.0 in January.

- Construction Spending for January fell 1.7% versus estimates of a .7% decline and a downwardly revised 1.3% drop in December.

BOTTOM LINE: ISM Manufacturing in February fell slightly less than estimates, Bloomberg reported. The New Orders component of the index fell to 49.1 from 49.5 the prior month. The Inventory component fell to 45.4 from 49.1 the prior month. The Employment component fell to 46 from 47.1 in January. The Export component of the index fell to 56.0 from 58.5 the prior month. While this gauge is indicating modest contraction in manufacturing, it is not around levels normally associated with recession. I expect ISM Manufacturing to bounce back near 50.0 in this month on inventory rebuilding.

Construction spending fell more than economists had predicted in January, Bloomberg reported. Private residential construction fell 3% versus a 2.6% decline the prior month. Construction spending will remain muted over the intermediate-term as commercial construction slows and residential construction remains weak as homebuilders continue to work down inventories.