Yuck.

That’s one word to describe the juxtaposition between a sharp deceleration in a key gauge of US manufacturing demand and a blazing-hot read on factory input costs.

The US macro backdrop scarcely needed to get any more foreboding ahead of Friday’s all-important jobs report, but it did on Monday when the first of this week’s top-tier data readouts found the new orders gauge in the ISM manufacturing report diving into contraction territory.

At 48.6, the index dropped almost seven points from January.

That was the largest month-to-month decline since — drumroll — April of 2020, which is to say the biggest sequential drop since the darkest days of the pandemic.

Although the ISM headline remained in expansion, at 50.3, it missed estimates. Consensus wanted 50.7. Insult to injury: The employment index fell to 47.6, back in contraction.

The word “tariff” came up 20 times in the release, including in all but two of the panelist anecdotes. “Customers are pausing on new orders as a result of uncertainty regarding tariffs,” someone in Transportation Equipment said, adding that “there is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business.”

Indeed. As I put it last week, there’s no plan at The White House. The idea — perpetuated, unfortunately, by a lot of very smart people on Wall Street — that Donald Trump and Howard Lutnick have this all under control is pure fantasy. And Wall Street should know better. After all, they’ve all dealt with Trump and Lutnick, neither of whom were considered crème de la crème in their respective businesses.

The figure below shows the ISM prices gauge, which just rose a third month, and this time by a harrowing 7.5ppt.

That index is now the highest since June of 2022.

For what it’s worth — very little if you’re a trader — S&P Global’s manufacturing survey for the US covering February told an entirely different story on the demand front, but even there, Chris Williamson cautioned that the upturn in production and new orders “could be short lived” given that both were “buoyed by companies and their customers building inventory to beat price hikes and supply issues caused by tariffs.”

Williamson, S&P Global’s chief business economist, went on to say that optimism about the year ahead has fallen, and there’s no ambiguity around why. “Worries have noticeably swelled in relation to the inflationary impact of tariffs, which were widely reported as having caused factory input costs to spike higher in February,” he said.

The ISM panelist quotables were gold this month. For example, someone in Nonmetallic Mineral Products told the survey that “management now has us running scenarios to project tariff impacts to our business [and] they want numbers in 24 hours on variables that equate to a wild guess.” “Interesting times we live in,” the same person remarked, dryly.