July ISM = 50.9

The July ISM index dropped to 50.9. The index is down nearly 10 points in the last three months.

Whenever the ISM drops to 44.4 or less, the odds of a recession jump much higher. We’re still above the danger zone. The ISM has fallen between 50.0 and 51.0 a total of 49 times. Only three of those readings come during official recessions.

Here’s a look at total months and months in a recession by different ISM readings:

From:: To: Months Mos in Recession
70 more 6 0
65 69.9 30 0
60 64.9 83 3
55 59.9 186 3
50 54.9 214 9
45 49.9 136 25
40 44.9 56 33
35 39.9 39 36
Under 35 13 13

During the 10-year expansion from April 1991 to March 2001, the ISM came in at today’s reading or less 46 times, yet none was a recession.

Posted by on August 1st, 2011 at 10:30 am


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