Supply-Side Issues Continue To Dominate ISM Report

Within the slightly-weaker-than-expected Jun Manufacturing ISM (60.6 vs 60.9 survey), it was once again bottleneck / supply side issues that caught the eye in the ISM report.

• On the 49.9 Employment reading, the first <50 figure after 6 consecutive monthly expansions - once again, it's about the supply of labor, not the demand for it: "Continued strong new-order levels, low customers' inventories and expanding backlogs continue to support employment strength; however, survey panelists' companies continue to struggle to meet labor-management plans. An overwhelming majority of panelists indicate their companies are hiring or attempting to hire, with approximately 36 percent of comments expressing difficulty in filling positions. A significant number of panelists are noting employee turnover due to wage dynamics in the markets."
• The Prices index hit 92.1, the highest since July 1979 (93.1) and the 6th consecutive month above 80%. Per Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee quotes in the report: "Virtually all basic and intermediate manufacturing materials are experiencing price increases as a result of product scarcity and the dynamics of supply and demand, with an increasing number of panelists reporting higher prices compared to May."