The Institute for Supply Management showed an above-red reading this morning in the manufacturing sector. This month’s ISM Manufacturing reading came in at 51.6% for September versus 50.6% in August.
Bloomberg was calling for a 50.5 reading, while 50.0 is the Maginot Line between growth and contraction. Inventories posted a tiny drop to 52.0, indicating that businesses are still running lean on inventory but also still in growth mode.
New orders rose marginally to 49.6% but that is still barely in the red. Prices paid rose 0.5 points to 56.0, and the employment component rose by 2 full points to 53.8.
Many will not be excited about the ISM Manufacturing data this morning. In a world where bad news is dominating the tape, anything green is better than red and this shows that the market pessimism may be more pessimistic than the reality of the economy.
This is just more follow-on data indicating very slow growth rather than a new recession or a double-dip recession.
JON C. OGG