The ISM Manufacturing report was as dismal as one could expect and definitely well into the recession levels for those who have been on the fence. The Institute for Supply Management showed that manufacturing activity in the U.S. declined at probably the worst since 1982.
The ISM index fell to 36.2% in November from 38.9% in October, thelowest since the early 1980’s. We had a consensus from economists at36.5% to 37%. This is so far under the 50.0%reading that there is no question about the manufacturing side of theeconomy being in a recession.
And it looks even worse for the "looking ahead" data as the new ordersindex fell to 27.9%. That means that what was already slow is grindingdown to a halt. The prices paid index also appears to be amulti-decade low of 25.5%. In other words, no pricing power exists.
For those who were hoping for good news, let’s just say the good news is coming… just not any time soon.
Jon C. Ogg
December 1, 2008