September’s US ISM manufacturing PMI price index contracted for the first time this year

The US ISM manufacturing PMI survey for September was weaker than expected as the index held steady at 47.2 to reflect the same pace of industry contraction, instead of improving to the consensus of 47.6.

This marked the sixth consecutive month that the index remained below the 50.0 mark, as most components reflected a slowdown in the period. Notably, the price sub-index fell 5.7 points to 48.3 from its August reading of 54, its first contracting reading this year.

The employment component came in at 43.9, down 2.1 points from the previous reading of 46, while new orders rose to 46.1 from 44.6. The manufacturing index also improved from 44.8 to 49.8, but remained in contraction, while inventories also fell.

Link to US ISM Manufacturing Survey (September 2024)

“Demand continues to be weak, output has declined and inflows have remained accommodative,” noted Supply Management Institute President Timothy Fiore.

“Demand remains subdued as companies have shown a reluctance to invest in capital and inventory due to federal monetary policy – ​​which the US Federal Reserve has addressed up to the time of this report – and election uncertainty.”

Market reactions

USD chart overlay against major currencies by TradingView

The greenback, which saw increased volatility about an hour before the release of the ISM manufacturing PMI, had a brief bearish reaction to the weaker-than-expected results.

USD/JPY and USD/CHF were already lower ahead of the report, so these pairs saw the steepest declines afterwards. The dollar’s losses against the Kiwi and Aussie were quickly pared as the US currency recovered almost instantly against most of its peers.

The JOLTS job openings report was also released at the same time and the numbers came in stronger than expected as they came in at 8.04 million in July versus the expected reading of 7.64 million and the previous figure of 7.71 million.