US OUTLOOK/OPINION: ISM Manufacturing Preview: Activity Set To Pick Up (1/2)

August's ISM Manufacturing report (out Tuesday Sep 2nd 1000ET) is seen by Bloomberg Consensus as showing a slight improvement to 48.9 from July's 48.0.

• The report will be published shortly after the final release of August S&P Global Manufacturing PMI, which showed a surprisingly strong 53.3 in the flash reading. That was the highest since December and marked a 2nd consecutive improvement. There has been a divergence in the ISM vs PMI readings of late, with ISM sagging as PMIs hit new recent highs.
• Additionally, the MNI Chicago Business Barometer slowed 5.6 points to 41.5 in August, though the decline wasn't quite as stark based on ISM weights.
• However the theme of general improvement is evident in the regional Fed banks' manufacturing surveys, which showed a 5th consecutive month of improvement on aggregate after April's trough, albeit roughly steady from July.
• That said, it was a mixed bag region-by-region in August's surveys. The Kansas City Fed's reading was steady, while there were improvements in New York and Richmond, and deteriorations in Dallas and Philadelphia.
• One theme across most of the regional Feds (4 out of 5, Philly the exception) saw improvements in new orders, which may tip the balance toward a solid manufacturing ISM.