ISM Correction Heartburn

ISM twice revised its manufacturing numbers today, then issued this Correction Notice.

ISM ® has discovered an error in its software programming for calculating the May 2014 Manufacturing PMI ® that was released at 10 a.m. ET this morning. “We apologize for this error. We have recalculated and confirmed that the actual index indicates that the economy is accelerating ,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management ® (ISM ® ) Manufacturing Business Survey Committee. “Our research team is analyzing our internal processes to ensure that this doesn’t happen again,” he added. “The May PMI ® registered 55.4 percent, an increase of 0.5 percentage point from April’s reading of 54.9 percent, indicating expansion in manufacturing for the 12th consecutive month. The New Orders Index registered 56.9 percent, a n increase of 1.8 percentage points from the 55.1 percent reading in April, indicating growth in new orders for the 12th consecutive month. The Production Index registered 61.0 percent, 5.3 percentage point s above the April reading of 55.7 percent. Employment grew for the 11th consecutive month, registering 52.8 percent, a decrease of 1.9 percentage points below April’s reading of 5 4.7 percent. The Supplier Deliveries Index registered 53.2 percent, 2.7 percentage points below the April reading of 55.9 percent. Comments from the panel reflect generally steady growth, but note some areas of concern regarding raw materials pricing and supply tightness and shortages.”

Correction Heartburn

CNN Money reported Oops! Heartburn in Stock Market After Data Mix-Up

Oops! Manufacturing index corrected: The Institute for Supply Management's initial manufacturing showed an unexpected dip to 53.2 in May from 54.9 in April. That meant the pace of manufacturing expansion slowed a bit. Investors had expected a spring pickup.

But then, according to multiple reports, ISM corrected itself by saying manufacturing activity actually improved to 56. That helped ease concerns about the economy, and the Dow Jones industrial average quickly climbed back into positive territory on the reports.

But then ISM corrected itself a second time, saying the correct reading is 55.4. ISM has not responded to several requests for comment from CNNMoney.

In spite of the upgrade, ISM still came in below consensus, but this was a better showing than originally posted.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com