Search
All
Economics
Politics

Don’t Miss a Post. Subscribe now.

ISM Manufacturing Now Signals Recession for the First Time in 30 Months

•

•

13 comments on ISM Manufacturing Now Signals Recession for the First Time in 30 Months

•

Chart and excerpts below by permission from the Institute for Supply Management ® ISM® 

Please consider the December 2022 Manufacturing ISM® Report On Business®

“The December Manufacturing PMI® registered 48.4 percent, 0.6 percentage point lower than the 49 percent recorded in November. Regarding the overall economy, this figure indicates contraction after 30 straight months of expansion.”

“The U.S. manufacturing sector again contracted, with the Manufacturing PMI® at its lowest level since the coronavirus pandemic recovery began. With Business Survey Committee panelists reporting softening new order rates over the previous seven months, the December composite index reading reflects companies’ slowing their output.

Demand eased, with the (1) New Orders Index remaining in contraction territory, (2) New Export Orders Index markedly below 50 percent, (3) Customers’ Inventories Index in ‘just right’ territory, and (4) Backlog of Orders Index recovering slightly but still in strong contraction. 

“Of the six biggest manufacturing industries, one — Petroleum & Coal Products — registered moderate growth in December.

The ISM is a diffusion index, signaling direction not amount. For example a firm hiring 10 workers and a firm laying off 200 workers balances out. 

Diffusion indexes have issues. There is a survival bias and a weighting bias noted by the example above. 

That said, it’s clear what’s happening to manufacturing. Notably, prices have collapsed. 

Global Manufacturing Slump Continues at End of 2022 as Output and New Orders Fall Further

Yesterday, I noted Global Manufacturing Slump Continues at End of 2022 as Output and New Orders Fall Further

Excluding the early months of the pandemic, manufacturing is at the lowest level since 2009.

Nearly the whole world is slowing. 

This post originated on MishTalk.Com.

Thanks for Tuning In!

Please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish

Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish

Mike Shedlock

Recommended Articles

Comments to this post are now closed.

13 Comments
Newest
Oldest Most Voted
oee
oee
3 years ago
Dead wrong. Manufacturers maybe in recession. however, the national econ will be in recession when the index hits 42. Also, the econ added +223000 jobs in December. There is no scenario where there is job creation and a reccession follows. The Biden/Harris admin has created more than 10 MILLION JOBS in 23 months of mandate vs. NET LOSS OF 2.50 IN TRUMP/PENCE in 48 months of mandate.
No reccession; no robots taking over jobs and the econ has low productivity.
0
0
oee
oee
3 years ago
Reply to  oee
UPDATE: The Biden/Harris admin has created 11.24 Million new jobs in 23 months of mandate!
0
0
Mouse
Mouse
3 years ago
I used to follow Mish years ago when he wrote his Global Economic Monitor. He used to focus on economics with an occasional blurb about his Chicago politics. But he started shifting more into politics, and his explanations of economic activity suffered. I stopped reading it.
Over the Christmas break, someone sent me a link to this new site. I wanted to see if maybe Mish had returned to economics. I am disappointed.
Some in the comment section at least attempt to “read between the lines” of economic activity. Mish and a growing legion of left wing commenters just whine about republicans over and over and over. And just like Don Lemon or Rachel Maddow, Mish keeps insisting he doesn’t have Trump Derangement Syndrome. Perhaps someday Mish will convince himself?
I mentioned this on an earlier post. Mish replied with a childish playground taunt that rhymed “mouse” and “house”. Very Trump like behavior. Maybe that is the real psychology reason why Mish hates Trump so much: Trump reminds Mish of his own worst self.
I’m sure Mish is now going to prove all of this correct by banishing me from his little tree fort club house.
0
0
Jack
Jack
3 years ago
Reply to  Mouse
Yawn.
Seems to me you are the only one whining or talking about Trump here.
To me, the market bounced off resistance at the end of November and has been consolidating since mid-Dec. I anticipate that the market may continue to drop marginally below the early Oct lows. I struggle to see the market taking off this year – probably trade even or slightly lower this year.
0
0
Mouse
Mouse
3 years ago
There will be no official recession because the Biden regime changed the definition of recession.
0
0
Christoball
Christoball
3 years ago
The poor and much of the middle class has already spent their stimulus money on survival. For those a ratchet or more above; I get the feeling that a lot of the stimulus money got spent on Stocks and Real Estate near the top, and is loosing redemption value as we speak.
0
0
shamrock
shamrock
3 years ago
Wow that prices paid index at 39.4 is really dropping off a cliff. Inflation is over?
0
0
Mouse
Mouse
3 years ago
Reply to  shamrock
People are struggling to pay for heat. Massive yoy inflation in energy costs.
People are struggling to pay for Obamacare. Massive inflation in healthcare, except for welfare recipients.
People are struggling to pay for education. Education inflation has outpaced everything for decades, while quality collapsed.
There is no money left over for other things, but the people selling those other things are desperate to sell. That’s not deflation. That’s desperation.
0
0
MPO45
MPO45
3 years ago
The real story in manufacturing is the labor shortage.
It won’t get better with 10,000 boomers retiring every day, education across the country a total mess, and not enough young people to train anyway.
Meanwhile, politicians playing games can’t even get a leader in the House elected. It’s like the band playing on while the Titanic sank, at least people felt good about themselves right before they died.
0
0
shamrock
shamrock
3 years ago
GDPNow is 3.9% as of yesterday, another update tomorrow which will take this data into account.
0
0
tractionengine
tractionengine
3 years ago
Reply to  shamrock
What value does GDPNow offer? The only decision you can base on it is to ignore it – it is wrong as soon as it’s forecast is released. As you say, 3.9% yesterday, today it’s changed as it does every day. Why Mish has positive interest in it I don’t understand. Perhaps someone can educate me about this. Even its creator admits it’s a work in progress.
0
0
PapaDave
PapaDave
3 years ago
Reply to  tractionengine
It provides the same value as all economic stats. Which is a fuzzy picture of a moving target.
All such economic numbers are just best guesses based on limited data, that are subject to constant revision as more data comes in over time. Sometimes the numbers are a decent reflection of what they are attempting to measure, but sometimes they are not.
Yet these best guesses are all we have to base a lot of decisions on. But they are better than no numbers at all. Better than flying blind.
I look at all these numbers with the understanding that they are well intentioned, but very inaccurate. Yet I still pay attention to them all, because, in aggregate, they help paint that fuzzy picture of what is happening, so I can make my decisions.
The vast majority of decision makers in the world do the same thing, because they have no choice. They have to make decisions and they look for whatever data is available to make them on.
So when any economic number comes out (GDP, jobs, inflation ISM, etc) , markets immediately react, because the decision makers (or the computer algorithms they create) are reacting. Not because they know the number is perfect, but because its the only number they have to work with.
Of course, there are also a small percentage of cult conspiracy kooks who have nothing better to do and will tell you that all these numbers are deliberately manipulated by some secret cabal for some secret purpose. Fortunately, none of these people are important decision makers. They are just fringe lunatics who have nothing better to do with their time. And they are best ignored. I ignore a lot of them on this site with the IGNORE button. That saves me a lot of time as I glance through Mish’s articles and the comments section.
0
0
KidHorn
KidHorn
3 years ago
Doesn’t matter if manufacturing slows. People spent all their stimulus money. So, they can’t afford anything.
0
0

Decorate Your Walls with Mish Fine Art Images

Click each image to view details or purchase in the store.

Stay Informed

Subscribe to MishTalk

You will receive all messages from this feed and they will be delivered by email.