Monday, July 2, 2012

Not a big surprise

Today's ISM release is not a big surprise due to poor regional mfg surveys released in June. Philly Fed, especially, gave us heads up on June 21st. Surprise or not - U.S. manufacturing recorded its first contraction in 3 years. If this becomes a trend, stock market will suffer. Prolonged manufacturing contraction leads to recession. This index is to be watched closely and with great trepidation.

click on chart to enlarge


  1. somehow every single economist interviewed by Bloomberg missed the call for ISM contraction.

  2. Ugly number this morning, does not bode well for the US economy across Q3/4.

    Considering Japan, UK, and the EU is already in recession, it bemuses me how so many still think the US is immune to it.

  3. Christian Liberty, economists are definitely having a tough time now. This was a no-brainer though, after Philly Fed. Its correlation with ISM Mfg Index is very high.

  4. Permabear Doomster, I totally agree. Decoupling was a myth, now clearly dispelled by the latest weak U.S. economic numbers.