ISM Report On Business

[1] In addition to being market moving, the ROB makes an important contribution to the American statistical system and to economic policy.selected Edward T. Gushee, a purchaser from Detroit, Michigan, to supervise the organization's survey group and expand the information they gathered.The index, based on analytical work by the DOC, adjusts four of the five components of ISM's monthly survey — new orders, production, employment, supplier and deliveries — for normal seasonal variations, adds in inventories, applies equal weights to each and then calculates a single monthly index number.An update of research performed by Theodore S. Torda, a DOC economist, shows a close parallel between growth in real Gross Domestic Product (GDP) and the PMI.The percent response to the "Better," "Same," or "Worse" question is difficult to compare to prior periods; therefore, ISM diffuses the percentages for this purpose.The initial figure of 53.2 was lower than anticipated and indicated a slowing of the pace of factory-sector growth, and this caused stocks to dip instantly.Economists immediately queried the accuracy of the report and determined that ISM had incorrectly applied seasonal adjustments from the previous month.ISM's final correction of 55.4 was almost in line with Wall Street expectations, indicating brisk growth, and the stock market rebounded quickly and closed the day with a modest gain.In a statement, ISM attributed the errant report to a software glitch that "incorrectly used the seasonal adjustment factor from the previous month."