US January ISM manufacturing 49.1 vs 47.0 expected

<ul><li>Best since October 2022</li><li>Prior was 47.4</li></ul><p>Details:</p><ul><li>Prices paid 52.9 vs 45.2 prior</li><li>Employment 47.1 vs 48.1 prior</li><li>New orders 52.5 vs 47.1 prior</li><li>Inventories 46.2 vs 44.3 prior</li><li>Production 50.4 vs 50.3 prior</li></ul><p>The prices paid is a worry but note that it fell sharply the month before. Manufacturing has been in a recession for some time but looks to be coming out of it.</p><p>Comments in the report:</p><ul><li>“The start of 2024 looks good. Sales are above expectations, and
costs are mostly stable. A few commodities are up in cost due to supply
shortages. Many previously short commodities market positions have
corrected themselves. There is a real short-term increase in the cost of
international freight.” [Chemical Products]</li><li>“The commercial vehicle market appears to be retracting a bit in
2024 compared to last year. Forecast sales have decreased slightly in
most product segments, with only limited growth related to customers’
competitive sourcing and moves to new technology. Most supply chains,
including for semiconductors, have stabilized, with the only major
escalation now being transit through the Red Sea.” [Transportation
Equipment]</li><li>“Business continues to stabilize. Cash flow will be tight in 2024.” [Food, Beverage &amp; Tobacco Products]</li><li>“U.S. economic outlook is affecting customer orders, and the current
backlog is quite low compared to past quarters. Waiting on potential
improvements from the CHIPS and Science Act.” [Computer &amp; Electronic
Products]</li><li>“December sales were very strong but slower for the first part of
January, as was expected. We expect to see steady sales going forward,
if the (U.S. Federal Reserve) continues to hold rates and suggests a
rate cut in the future.” [Machinery]</li><li>“Good start to the year. We had budgeted a 3.5-percent increase over
2023. We expect it to be a challenging year. Currently, orders are
positive in our automotive OEM and automotive aftermarket business. Our
industrial business sector is looking weak at the moment. Still expect
to achieve budget forecasts through the first quarter. (We) feel January
is running high for automotive because at the end of December, many
OEMs cancelled the last few weeks of orders to reduce inventory levels.”
[Fabricated Metal Products]</li><li>“Order backlog, which was at historically high levels, is
diminishing due to supply chain improvements and slight slowdown of
orders.” [Miscellaneous Manufacturing]</li><li>“Demand continues to be slow. Reduction from the second half of 2023
has continued into this year. We are adjusting production to match
demand.” [Electrical Equipment, Appliances &amp; Components]</li><li>“Current industry conditions are positive; however, a note of
caution as we see potential headwinds with downward price movements in
the coming months.” [Primary Metals]</li><li>“Remarkable slowdown in business in December. January has picked up, but not to previous-year levels.” [Textile Mills]</li></ul><p>Prices paid:</p>

This article was written by Adam Button at www.forexlive.com.