US Stability (at low levels) in the August mfg. surveys-110165494

North America Economic Research03 September 2024J P M O R G A Nwww.jpmorganmarkets.comEconomic and Policy ResearchAbiel Reinhart(1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NAThe manufacturing PMI and ISM surveys continued to exhibit soft readings in August and are at levels that are on the low side of what would normally be seen in a growing economy. Both surveys have improved earlier in the year and since then have retreated near their cycle lows, although since the improvement wasn’t that large to begin with the recent softening also isn’t that significant and doesn’t suggest a sharp deterioration in activity. For the PMI, the final August reading (47.9) was hardly changed from the flash survey (48.0) and is down from 49.6 in July. For the ISM, the composite was 47.2 in August vs. 46.8 in July, and down from the recent high of 50.3 in March.Measures of new orders and production softened across both surveys between July and August. The message here is mostly similar to the headline: weaker than earlier than in the year, though slightly better than cycle lows. The one measure that stands out is ISM production, which has declined for five straight months and at 44.8 is weaker than at any other time post-COVID. The index did fall to similar levels in late 2019, but this index is very much on the end of non-recession readings. Employment readings across the two surveys were mixed between July and August but on balance are weak. For the PMI, employment has fallen over the last couple months and is now almost back at the cycle lows from 4Q23. On the other hand, the ISM measure, which had already fallen to a cycle low of 43.4 in July, rebounded to 46.0 in August, though looking past the monthly volatility it still appears that this measure could be slowly drifting lower. Inventory measures were also mixed across the surveys. For the PMI, the stocks of inputs index edged down in August, and S&P characterized recent readings on this index as consistent with stocks falling for six straight months. On the other hand, while the stocks of finished goods index did also decline it remains near historical highs. The ISM inventories index meanwhile had been quite low in recently, but jumped 5.8 points to 50.3 in August. According to the ISM, a reading above 44.4 is usually consistent with rising inventories in the GDP report. See page 4 for analyst certification and important disclosures.US: Stability (at low levels) in the August mfg. surveys 2Abiel Reinhart (1-212) 270 4058abiel.reinhart@jpmchase.comJPMorgan Chase Bank NANorth America Economic ResearchUS: Stability (at low levels) in the August mfg. surveys03 September 2024J P M O R G A N354045505560652007200920112013201520172019202120232025Index, saManufacturing survey composite indexesISM PMISource: ISM, S&P Global, J.P. Morgan20304050607007091113151719212325Index, saProduction (output) measures from manufacturing surveysSource: ISM, S&P Global, J.P. MorganPMIISM 20304050607020072009201120