ISM Manufacturing & All Major Components in Contraction

Source: Economics Group of Wells Fargo Bank, N.A. Summary The November ISM brought more of the same; activity remains stuck in a rut with all major components in contraction. The one surprise came from a jump in prices paid. Slower price declines can be traced to key commodities, but the descent in goods prices may be finding a floor. Across-the-Board Contraction If the ISM manufacturing index were the only economic indicator you could consult this year, it would sure look like the economy is in recession. Activity remained stuck in the same rut in November with the headline ISM number at 46.7, unchanged from where it stood in October, not even budging a tenth in either direction (chart). All five sub-components that feed into the headline were in contraction in November. Production came in at 48.5, down 1.9 points which, while not a huge move, crosses the 50 line and signals mild contraction versus slow expansion (chart). With less work to be done, industry-oriented businesses are cutting back on hiring with the employment component falling deeper into contraction at 45.8. Orders are also still falling, though not as much as last month, but the production pipeline is looking worryingly thin with the index for backlog of orders falling to 39.3. It may be true that nothing lasts forever, even cold November rain, but the ISM first broke through into contraction territory in November 2022 making this November the 13th month of contraction. READ FULL ARTICLE >>