ISM

The Institute for Supply Management’s September index fell to 52.6 from 52.9 in August, a weaker-than-expected reading, which will add to market concerns about the speed of recovery. The data suggest “peak upward momentum” has passed in leading indicators of cyclical activity. In September, the most-heavily weighted new orders component fell to 60.8 from 64.9 in August. The August reading had reached the highest level since April 2004, and all else constant, was consistent with a 6% pace of overall GDP growth. But this overstated the pace of improvement in other parts of the economy away from a snap back in manufacturing, particularly the trend demand pace. Among other components, production fell to 55.7 from 61.9, while backlogs rose to 53.5 from 52.5. Supplier delivery times (a member of the Index of Leading Economic Indicators) rose to 58.0 from 57.1. Inventories fell at a slower pace, with the index at 42.5 (still well below a break-even 50), from 34.4 in August. Employment fell to 46.2 from 46.4. According to the ISM report, “while the rate of growth moderated slightly whencompared with August, the recovery broadened as the number of industries reporting growth increased from 11 to 13 (of 18).