MNI DATA PREVIEW: July ISM Mfg Index Seen 52.0, Downside Risk

By Kevin Kastner, Alexandra Kelley, and Brooke Migdon

     WASHINGTON (MNI) - The ISM manufacturing index is expected to increase to a

reading of 52.0 in July after three straight declines when it is released on

Thursday. 

     MNI expectations are more optimistic than the recently released flash

Markit estimate, which fell to a reading of 50.0 from 50.6 in the previous

month. However, weaker readings in a few districts and past misses suggest there

is some downside risk.

Here are some key points to keep in mind:

     - The regional data was varied in July, but sharp declines in both the MNI

Chicago and Richmond readings lend downside risk for the ISM measure and

manufacturing in general.

     - Analysts have overestimated the headline ISM index in July in three of

the last four years. A slight underestimate in June, when regional data

suggested considerable weakness in the ISM measure, may lead analysts to aim too

high this month.

     - The ISM manufacturing employment index rose further in June, but regional

data have been mixed in July. Again, softer reading in the Richmond and Chicago

data add some uncertainty.

     - Based on a number of regional data, the ISM price measure could post a

solid gain in July, with only the Empire State reporting a decline in July.

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

--MNI Washington Bureau; +1 202 371 2121; email: alexandra.kelley@marketnews.com

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUPR$,M$U$$$]