ISM Index Drops

The ISM report came out today and it showed a drop from 59.7 in May to 56.2 for June. As I’ve written before, the ISM report is probably one of the best indicators for telling us if the economy is in a recession or not.
Any reading above 50 indicates that the economy is growing. Below 50 means it’s shrinking. Even though the reading is still above 50, this was a big drop from May. This is the biggest drop since late 2008. Wall Street was expecting a drop but only to 59.
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The Institute for Supply Management noted in today’s press release that “if the PMI for June (56.2 percent) is annualized, it corresponds to a 4.8 percent increase in real GDP annually.”

Posted by on July 1st, 2010 at 10:09 am


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