economy Markets

Outright ISM Collapse Masked By Deliveries Anomaly For Second Month

Despite the headline "beat", it's awful.

ISM manufacturing plunged to an 11-year low in April, data out Friday showed. The gauge printed 41.5, the worst since April of 2009. That was actually far better than consensus, which was looking for 36. The range was 30 to 45 from 72 economists. This is just further confirmation of what everyone in the country already knows - the US is in a deep economic slump the likes of which most living people have never witnessed. "Comments from the panel were strongly negative (three negative comments for every one positive comment) regarding the near-term outlook, with sentiment clearly impacted by the coronavirus pandemic and continuing energy market recession", ISM chair Timothy Fiore said, stating the obvious. Some of the subindexes were a predictable disaster. Production, for example, tumbled more than 20 points to 27.5, the worst on record. New orders plunged to 27.1, a dramatic 15-point drop. Employment was awful. And on and on. Yet again, it looks as though the headline gauge is being inflated materially by an elevated read on the supplier deliveries index. This was readily apparent in March and was even more prominent in April. To wit, from the report: The delivery performan
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