Speaker 1: Global business news twenty four hours a day. If Bloomberg
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Speaker 1: This is a Bloomberg business flash from Bloomberg World Headquarters.
Speaker 1: Charlie held out the down in SMP both lower, NEZ
Speaker 1: SNAK is higher up four tens of one percent. We've
Speaker 1: got the tenure down eleven thirty seconds. That yield one
Speaker 1: point four nine percent gold up to sixty ounce. The
Speaker 1: thirteen fifty five a game there are two tens of
Speaker 1: one percent. Stocks of being a move to lower via
Speaker 1: a route in energy producers. Crude oil plunging through forty
Speaker 1: of barrel for the first time since April. Crude is
Speaker 1: now down four percent at thirty nine ninety two, a
Speaker 1: drop right now of a dollar sixty eight a barrel
Speaker 1: on West Texas Intermediate SMP down three to one seventy
Speaker 1: had dropped there of two tens of one percent. The
Speaker 1: down down thirty nine points, have got there of two
Speaker 1: tens of one percent. NAZ stack up nineteen a gain
Speaker 1: of four tens of one percent. I'm Charlie Pellett, and
Speaker 1: that's a bad business flash. This is taking stock with
Speaker 1: Kathleen Hayes and Pim Fox on Bloomberg Radio. The Institute
Speaker 1: for Supply Management the US factory sector de'ccelerating modestly in
Speaker 1: July but posting a fifth consecutive month of growth. What
Speaker 1: does this all mean? Well, that's why we have Brad Holcombe.
Speaker 1: He is the chairman of the Institute for Supply Management
Speaker 1: and he joins us from Tempe, Arizona. Brad, thanks very
Speaker 1: much for being with us. Tell us about new orders
Speaker 1: and production. They're both growing, aren't they? Well, they are,
Speaker 1: and as you mentioned, the p m I is off
Speaker 1: just over a half a point, but still pretty consistent
Speaker 1: with what we've seen for the fast few months. New
Speaker 1: orders is leading the way at fifty six point nine
Speaker 1: is down a tenth of a point, still a very
Speaker 1: strong number, supported by a number of our our largest industries.
Speaker 1: And production is up seven intensive a point. Uh to
Speaker 1: not only keep up with new orders, but it also
Speaker 1: had the opportunity to work into the backlog of orders,
Speaker 1: which is down four and a half percentage points to
Speaker 1: forty eight this month. Well, Brad, you know, bottom line,
Speaker 1: as long as the Purchasing Managers Institute that you at
Speaker 1: the Institute for Supply Management produced is above fifty, It
Speaker 1: signals expansion. And I'm on my Bloomberg now and I'm
Speaker 1: you know, scrolling back and scrolling back. I mean, we
Speaker 1: haven't been below fifty probably since the the final months
Speaker 1: of the Great Recession. And even with the components that,
Speaker 1: you know, it's really hard to nickpicky, get nickpicky, except
Speaker 1: maybe for you know, the employment component felt just below
Speaker 1: fifty because production stayed strong, new orders eased off a bit,
Speaker 1: but still well above fifty. Do you see any sign
Speaker 1: of a real cooling off here? No, I really don't,
Speaker 1: you know, And I really appreciate your comments, because it's
Speaker 1: hard to take issue with with the number set today.
Speaker 1: It looks a lot like last month, quite frankly, and
Speaker 1: as I said, the continuation of the trend for the
Speaker 1: last five to seven months on the employment one, you know,
Speaker 1: we expected to hang around fifty for the rest of
Speaker 1: the year, to end up with zero employment growth between
Speaker 1: now and the end of the year. It's just the
Speaker 1: way the planning has gone. So there's nothing here that
Speaker 1: surprises me this month, and it's it all feels pretty consistent,
Speaker 1: as I said, with the trend set up this this
Speaker 1: year earlier. Brad does this seem consistent with the most
Speaker 1: recent GDP report of one growth. Actually, we would have
Speaker 1: you know, correlated and predicted higher between two and a
Speaker 1: half percent if we average January through July, and even
Speaker 1: three based on the July number. So the rest of
Speaker 1: the economy sort of you know, flanged up with us,
Speaker 1: we'd be at higher numbers. Well, this is a very
Speaker 1: important question Pin puts on the table, because what we've
Speaker 1: gotten that GDP report is that the U S economy,
Speaker 1: especially after all the revisions going back to is now
Speaker 1: growing at a one percent year over year rate. It
Speaker 1: is steadily decelerated, even as your I S M index
Speaker 1: has held up. Does that mean I S index is
Speaker 1: no longer a good indicator for the broad economy or
Speaker 1: is it simply that it's just a good indicator for
Speaker 1: the part of the economy it makes up, which is
Speaker 1: factories manufacturing. Well, that's particularly a good indicator of the
Speaker 1: manufacturing sector. But also, you know, in a couple of
Speaker 1: days we'll all see the non manufacturing report, and then
Speaker 1: together we represent the entire GDP from our perspective, and
Speaker 1: that is about seven professionals sitting in plants and and
Speaker 1: service companies across the company telling us actually what it
Speaker 1: looks like from inside the government numbers. You know, I'm
Speaker 1: not familiar with the process the revised from time to time.
Speaker 1: We rarely have ever do that. So this is is,
Speaker 1: you know, his real data race based on a pretty
Speaker 1: broad survey, Bradam money, If you could tell us what
Speaker 1: some of the respondents have said to you, particularly if
Speaker 1: you'd like to begin with the plastics and rubber products,
Speaker 1: they seem to be a bit more optimistic. That's a
Speaker 1: plastic guests, plastic and rubber products industry. One of the
Speaker 1: comments was, seems to be a bit more optimistic in
Speaker 1: the markets, but US presidential race might dampen the mood.
Speaker 1: Um personally, I don't necessarily agree with that. I think
Speaker 1: we've all factored that in. It is what it is.
Speaker 1: It's going to be one or the other, you know,
Speaker 1: and we'll see later on what that means. Brad. Going
Speaker 1: back again to the g P report, almost everything was negative. Um.
Speaker 1: Certainly any kind of construction, any kind of private investment
Speaker 1: was down. Another reason why it's kind of interesting and
Speaker 1: surprising maybe to see factories holding up so well, But
Speaker 1: exports were also a small positive contributor. What which which
Speaker 1: companies that you survey who's doing well. On the exports side,
Speaker 1: exports is finished goods, um, so it covers you know,
Speaker 1: as pretty broad and let me just turn to that
Speaker 1: particular page. But again, exports is UH is finished goods,
Speaker 1: whereas imports as raw materials. And in terms of what's uh,
Speaker 1: what's going and growing, paper products, computer and electronic products,
Speaker 1: fabricated metal products, food, beverage and tobacco, and transportation equipment
Speaker 1: as well as chemical products are on that list of
Speaker 1: growing in that category, Pratt just quickly. Commodities moving higher
Speaker 1: in price include copper that should be good for the
Speaker 1: industrial sector. Now well, yes, um, you know copper is
Speaker 1: actually on both lists up in price and down and
Speaker 1: price as indicated by different respondents. It could be a
Speaker 1: timing issue, but generally speaking, the medals are going up
Speaker 1: in this time frame, all right, Brad Hope, and thank
Speaker 1: you so very much for joining us. From the Institute
Speaker 1: for Supply Management putting on its Purchasers Purchasing Managers Index.
Speaker 1: It's basically an index of manufacturing growing for the fifth
Speaker 1: straight month but decelerating. This is Bloomberg coming up on
Speaker 1: taking stock. A look at Cantel Medical corp On the
Speaker 1: future plans for the company as a new CEO takes
Speaker 1: over