ISM: If You Have the Hot Potato, You Are Out

Source: Economics Group of Wells Fargo Bank, N.A.Summary Manufacturing activity expanded at the slowest pace of growth in the pandemic era in September, according to the ISM. Key measures point to slowing activity, but it is inventories that hold the key to understanding what is happening in the sector today. Firms are tired of having input prices weigh on profits, but are also leery of procuring hard-to-get supplies. In an effort to mitigate both of these risks, they are making sure someone else is holding the inventories. Forget Just-in-Time, You Hold the Inventory To understand what is happening in the manufacturing sector today it is helpful to consider everything in the context of inventories. Let’s start with the main numbers in the September manufacturing ISM. The headline fell to 50.9, a figure that is still in expansion territory, but marks the slowest pace of growth in the pandemic era (chart). READ FULL ARTICLE>>