Economic data to kick off the month hasn’t exactly been positive as the April read on ISM Manufacturing came in weaker than expected, falling to its lowest level of the year.  While economists were forecasting the headline reading to come in at a level of 56.5, the actual reading fell to 54.8, making it the biggest miss relative to expectations since last September’s report for the month of August.

While the headline number of the April report was weaker than expected, the overall tone of comments from respondents was positive according to ISM.  Below we provide a sampling of commentary from respondents included in the report.  Despite the fact that the report was weaker than expected, overall conditions in the manufacturing sector appear solid.

The table below breaks down this month’s report by each of its individual components.  Overall breadth in the report was skewed slightly negative on a month/month basis, but relative to where things stood last year at this time, conditions are much improved.

Finally, below we wanted to highlight a couple of notable charts from this month’s report.  First, on the employment front, that component saw its largest monthly drop this month since November 2008.  That doesn’t bode especially well for the employment report this Friday, but given the sector’s small size relative to the overall economy, it is not a major negative.  If we see this type of weakness in the employment component of the ISM Services report later this week, we’ll be a lot more concerned.

Finally, we’ve been talking a lot lately about how we expect strength in international markets to outpace the US going forward, and part of this can be seen in the measurement of export orders.  In this month’s report, that component increased to 59.5, which is the highest in six years.  When it comes to US vs ROW (Rest of World), ROW appears to be taking the lead.