The modest rebound in the May ISM manufacturing index is expected to have been transitory, based on the early signs from regional Fed factory surveys.
Even if the ISM-adjusted Empire state index was up by two points in June, it was a tad above the threshold at 50.3. In the mean time, the ISM-adjusted Philadelphia Fed survey dropped one point to 46.6. The headline ISM manufacturing index in the US is likely to have dropped in June to 50.5 from May’s 51.3, said Societe Generale in a research report.
The average of the ISM-adjusted Richmond, Philadelphia and New York surveys dropped 5.4 points from April to June. The survey has projected a change in the direction of the national ISM gauge.
The ISM index had dropped by only 0.5 points in April and May combined. It might “catch up” slightly to the combined fall witnessed in the ISM-adjusted measure in recent months, according to Societe Generale. A pattern akin to this was witnessed in the second half of last year.
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