Source: Economics Group of Wells Fargo Bank, N.A. Summary
The May ISM showed tariff pressure is beginning to bite for manufacturers who are seeing slowing activity, longer lead times and declining inventories. International demand is also drying up, with manufacturers reporting the lowest level of import orders since 2009.Trade Activity Back to 2009 GFC Levels
Manufacturing activity retreated again in May, notching the fourth-straight monthly decline for the ISM manufacturing index amid a measurable deterioration in trade-related activity. That is not to suggest that things were going swimmingly before the recent escalation in trade tensions. To be sure, the headline index failed to register even a single month on the good side of 50 in all of 2023 and 2024 (chart). But in the wake of the election, the factory sector had regained a little lost swagger.