ISM index suggests a contraction, but it’s no guarantee.
There was new ISM data released today. And it wasn’t good. Oh no!
The Institute for Supply Management (ISM)’s monthly index is considered a pretty good gauge of activity in the U.S. manufacturing sector. ISM goes around, asks a bunch of folks whether they’re buying supplies or not, and averages them (and their comments) out. A score above 50% is good. Below is bad – it suggests a contraction in manufacturing activity. Anyway, it’s now at 49.1%.
This is no guarantee the manufacturing sector is about to slip. Somebody on the Internet who is paid to do economic analysis pointed out:
From 1970 until 2009, the ISM manufacturing PMI fell below 50 on 17 instances during economic expansions.
11 of those 17 instances were in the “middle” on expansions (more than 12 months after the last recessions, but more than 12 months before the economy peaked).
— Callie Cox (@callieabost) September 3, 2019
Meanwhile, another important gauge of the manufacturing sector’s health – employment data – will be out this Friday when the jobs report comes out.
But look, let's say this is fraying your nerves. The trade fight with China is dragging a little bit, the fight seems to be a drag on manufacutirng, and President Trump seems to be trying to influence it all by tweet.
Is there something Congress could do … that polls well … that Trump himself says (or at least implies) he wants … and is incredibly overdue … that could help improve the fortunes of the American manufacturing sector?
Infra … infrastruct … I can’t think of the word!