On Friday, the Institute for Supply Management (ISM) released December’s U.S. manufacturing data. And it didn’t look promising…
Today’s chart shows the ISM Manufacturing Purchasing Managers Index. This index weighs factors such as: new orders, production, employment, supplier deliveries, and inventory.
An index score of 50 or more shows the sector is expanding. If the score dips below 50, it’s contracting.
From the chart below, you can see manufacturing is contracting at a rate we haven’t seen since the global financial crisis. The index fell to 47.2% last month – its lowest reading since 2009.
The ISM’s manufacturing index is a leading indicator for turning points in the business cycle.
December’s reading marked the fifth consecutive month of contraction, which puts into question the stability of the current economic expansion…
– Houston Molnar
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