Poor ISM for December

The December ISM report came out today and it wasn’t a good one. The Index fell to 48.2 for December. That’s the lowest reading since June 2009.

This was also the second-straight month in which manufacturing fell. Any ISM below 50 indicates that the manufacturing sector is getting smaller.

While today’s report is bad news, it’s not dire just yet. For one, the report only covers the manufacturing sector of the economy. Also, recessions have generally correlated with ISMs below 46 or so. During the stretch from 1995 to 1998, there were several weak ISMs even though the broader economy was doing well.

Since 1948, the ISM has been between 45.0 and 49.9 a total of 137 times. Only 25 have been during recessions. That’s 18.2%.

Posted by on January 4th, 2016 at 10:58 am


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