EmailThe ISM Manufacturing Index slipped below 50.0 for the first time since July 2009. The index fell from 53.5 in May to 49.7 in June. The Briefing.com consensus expected the ISM Index to fall to 52.2. The start of a contraction cycle in manufacturing is notable, but the data have been teetering on the edge of a contraction for quite some time. The regional Fed manufacturing surveys have pointed toward a contracting outlook for the past several months as every region has either entered or barely remained above its respective expansion/contraction threshold since March. Production in June fell from 55.6 in May to 51.0.
That was the result of the first contraction in new orders (from 60.1 to 47.8) since April 2009 and the continued depletion of unfilled orders (44.5 from 47.0). Not all of the details from the ISM report look discouraging. The employment index barely declined (from 56.9 to 56.6), implying that manufacturers believe the slowdown is temporary. Inflation trends weakened significantly as the price index declined from 47.5 in May to 37.0 in June.
