Today’s ISM Manufacturing report for the month of May showed that the US manufacturing sector continued to thaw as the temperature rose. While economists were expecting the headline reading to come in at 52.0, the actual reading came in at 52.8, which was up over a point from April’s reading of 51.5.
The internals of this month’s report were also very positive. As shown in the table below eight out of nine of the ISM Manufacturing report’s subcomponents increased in May, which is the strongest monthly breadth reading since last October. The biggest increases in this month’s report were in Prices Paid, Backlog Orders, and Employment. In the case of Prices Paid, its nine-point increase in May was the largest monthly increase since August 2012. Even after that increase, though, the Prices Paid index is still below 50 and respondents still noted more commodities that were down in price than up. On the downside, the only two components that showed monthly declines were Production and Export Orders. While there was a nice improvement in the ISM relative to last month, compared to last year at this time, things are notably weaker with Backlog Orders and Imports being the only components that are higher now than they were then.