ISM: 49.5, The Suck Continues

Posted 2012-12-03 10:36
by Karl Denninger
in Macro Factors

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 49.5 percent, a decrease of 2.2 percentage points from October's reading of 51.7 percent, indicating contraction in manufacturing for the fourth time in the last six months. This month's PMI™ reading reflects the lowest level since July 2009 when the PMI™ registered 49.2 percent.

Oops.

So where are the problems? In a few places -- and not in good ones either.

Employment is now negative, for openers. Adding to the negative is inventories both at suppliers and customers, making clear that customers are refusing to order replacement product and carry inventory.

New orders remained barely positive at 50.3 and order backlog remains strongly negative at 41. In addition both exports and imports are below the midline, destroying any argument that "exports will help us." Nope.

This is not a good report, and the drop in employment is a particularly-ominous indicator, coming in front of the NFP on Friday.

Here it comes! (Recession, that is.)

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