Close

October 1, 2012

Rates better after manufacturing up, construction spending down

October 1, 2012

Rates better after manufacturing up, construction spending down

Rates open the week a bit better than Friday as mortgage bonds are up this morning. The Fannie Mae 30yr 3% coupon is +19 basis points right now, which will help keep rates near record levels to start the week. The big news for the week is September’s BLS jobs report Friday. Below is a rundown of today’s data.

ISM Manufacturing Index (September 2012)

Index is 51.5 indicating modest growth.  Previous was 49.6 indicating modest contraction. 

This is a survey index by the Institute of Supply Manufacturing.  It samples 300 manufacturing companies.

Table below and full report here.

PMI Manufacturing Index (September 2012)

Index is 51.1 same as last month and, like ISM, indicative of modest growth.

The recent manufacturing data is decidedly mixed with last week’s terrible overall Durable Goods Orders and negative but not terrible core (without aircraft) DGO.  To review:  DGO was -13.2% overall and -1.6% ex-trans.

Construction Spending (August 2012)

Construction Spending – Month/Month -0.6%
Construction Spending – Year/Year +6.5%

Looking at manufacturing and construction collectively the overall picture is still slightly weak.  The large drop in DGO will impact exports and GDP.  This is a consequence of recession in the EU and slowing growth in Asia.

Full report here.