U.S. ISM manufacturing index fell 2.4 points to 56.6 in September U.S. ISM manufacturing index fell 2.4 points to 56.6 in September erasing the 2.1 point climb to 59.0 in August. The employment index fell to 54.6 from 58.1. New orders dropped to 60.0 from 66.7. New export orders declined to 53.5 from 55.0. Prices paid rose to 59.5 from 58.0. This a disappointing report, both in terms of the headlines and the internals, and will add further to Treasury gains.
U.S. construction spending undershot assumptions U.S. construction spending undershot assumptions given a surprising 0.8% August drop, after downward revisions that left a smaller July bounce of 1.2% (was 1.8%) and a larger 1.6% (was 0.9%) June decline. Thankfully, much of the downside construction spending surprise was in the home improvement residual that doesn't enter GDP calculations, though analysts also saw small downside surprises for nonresidential and public construction. New residential construction actually beat estimates to trim the downward implications for Q3 growth prospects. Analysts still expect Q3 GDP growth of 3.0% after the 4.6% Q2 climb, with component growth of 8% (was 7%) for Q3 residential construction after an 8.8% Q2 climb, 3% (was 12%) for Q3 nonresidential construction after a 12.6% Q2 increase, and a flat Q3 government sending figure after a 1.7% Q2 pop that partly reversed a prior big Q4-Q1 drop.