… the first Institute for Supply Management Manufacturing Index after the election comes in showing slight contraction (49.5, with anything below 50 indicating contraction) after an expansionary reading (51.7) just a month earlier.
Readers may remember that yours truly suggested that the orders-related elements of the index (i.e., the ones which lead to sales and truly tie into economic growth) showed signficant weakness in previous months. That’s especially true of orders backlog, which continued to stay in the pits in November, falling from 41.5 to 41.0. New Orders, at 50.3, fell 3.9 points in November. As long as the orders-related numbers stay weak, the manufacturing sector will be weak.