The Institute for Supply Management (ISM) has released its Report on Business for the month of June, and the numbers are pretty bad. In fact, the June report appears to be a four-year low at 47.0. The ISM represents that this is the worst reading since May of 2009. The ISM is trying to signal that the news is not as bad as might appear. It shows that future optimism did not flinch, suggesting the drop in current conditions could be temporary.
Tuesday’s report was positive on the jobs component and on the purchase volumes. The report sentiment represents that business impediments had a less favorable tone compared to last month. “No difficulties” was still the most popular response, but working capital shortages increased and skilled labor shortages decreased. Here is a breakdown of some of the data:
- The six-month outlook came in at 66.1 in June.
- Employment rose back above the breakeven 50 line, to 50.8 in June.
- Quantity of purchases, 55.8 in June, bounced sharply off May’s eight-month low.
- Prices paid was 50.0 in June, a 12-month low.
- Revenues were 50.0 in June, matching May’s six-month low.
- Expected demand was 50.0 in June, also shifting into neutral for the first time in three months.
It seems that the ISM is trying to remain optimistic, but the data doesn’t really read that way for an economy that is still struggling to stay on its feet.
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