In December, the US manufacturing ISM rose for a second straight month. The ISM for the manufacturing sector rose from 52.7 to 53.9, beating market expectations, which were looking for a more moderate increase to 53.5. The improvement is confirmed by the details as production (59.9 from 56.6), new orders (57.6 from 56.7), backlog of orders (48.0 from 45.0), employment (55.1 from 51.8), new export orders (53.0 from 52.0) and imports (54.0 from 49.0) all rose compared to the previous month. Inventories (47.1 from 48.3) and customer inventories (42.5 from 50.0) weakened in December and supplier deliveries remained broadly stable (49.9).
Cost pressures picked up somewhat in December, with prices paid rising from 45.0 to 47.5. Recently, the economic climate has improved in the US, which is again confirmed by the December manufacturing ISM, which picked up further after broadly stabilizing in the third quarter and at the start of Q4. The manufacturing ISM is now again at the highest level in six months, suggesting that the US economy was only going trough a soft patch, although uncertainty remains persistent due to the euro zone debt crisis and slowdown in Emerging markets.