The ISM Manufacturing PMI surprisingly dropped to 50.9 in September, from 52.8 in the previous month and below analysts’ estimates of 52.2. New orders (47.1 vs 51.3 in August) contracted and employment (48.7 vs 54.2) recorded the biggest drop since March 2020. Production increased only slightly (48.7 vs 54.2). Meanwhile, price pressures continued to ease (51.7, the lowest since June 2020 vs 52.5). "Following four straight months of panelists’ companies reporting softening new orders rates, the September index reading reflects companies adjusting to potential future lower demand. Many Business Survey Committee panelists’ companies are now managing head counts through hiring freezes and attrition to lower levels, with medium- and long-term demand more uncertain", Timothy R. Fiore, Chair of the ISM said.
Today's reading points to the slowest growth in factory activity since the beginning of the pandemic. Source: Bloomberg via ZeroHedge
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Major subindices - new orders, employment and prices all fell in September. Source: Bloomberg via ZeroHedge
Similar to recent data, today's reading points to the deteriorating state of the US economy. Declining employment and prices subindices suggesting that tighter financial conditions curbed demand for goods, which should please FED Chair Powell.
