With a quartet of district Federal Reserve canvasses and Markit Economics' survey of 600 companies nationwide to go on, the projection for the Institute for Supply Management's (ISM) September barometer should be considered provisional and subject to adjustment as additional regional purchasing manager reports are released. Manufacturing activity nationwide likely decelerated for a third straight month, leaving the ISM Purchasing Managers' Index (PMI) at 50.4 - the lowest reading since May 2013.
"Our forecast would place the PMI's summer-quarter average at 51.5 - a level normally associated with real GDP growth in the neighborhood of 2.5% in the past. The Bureau of Labor Statistics' (BLS) update on the employment situation in September is scheduled to be released the following morning. Consequently, the employment diffusion index likely will receive considerable attention in this report", says Societe Generale.
In contrast to the headline measure, hiring soundings in the aforementioned reports suggest that the ISM employment gauge likely improved by a little over one point to 52.3, hinting at a potential rebound in factory jobs after the 17,0900 positions shed in August.
On the inflation front, reports of higher input prices are expected to narrow once again in this week's report. Available regional surveys point to a 2.5-point drop in the ISM input-cost barometer to 36.5 - the softest reading since February.
