The U.S. ISM drop to a still-robust 58.2
The U.S. ISM drop to a still-robust 58.2 from 58.7 in October, a 13-year high of 60.8 in September, and a 6-year high of 58.8 in August left the ISM at remarkably lofty levels, as is the case with most of the producer sentiment indexes, despite the small two-month drop-back. The producer sentiment surveys have risen sharply with the hurricane rebuild, after showing little of the expected summer moderation from lofty peaks at the start of 2017. The rebuild-boost from Harvey, Irma, Nate and the California fires should extend into 2018. The ISM-adjusted average of the major surveys is slipping to a still-solid 57 from 58 in October and a cycle-high 59 in September, versus 55-56 figures since a 57 prior cycle-high last February and March. The average has climbed steeply from just 50 in 4 of the 5 months through September of 2016. The jobs index ticked-down to a still-firm 59.7 from 59.8 in October, leaving upside risk for our 260k November nonfarm payroll estimate from both the headline and jobs component.