Today brings some more sobering news on the economic front. The monthly Purchasing Managers Index declined yet again in September, capping a ten-point drop over the past year. It is now well below 50, the point at which activity is not merely growing slowly, but actually contracting:
Virtually every subindex declined in September, as did 15 out of 18 industries (the three exceptions were Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Chemical Products).
Over the past four months, production is down, employment is down, inventories are down, customer inventories are down, prices are down, exports are down, and imports are down. All are below 50. “Global trade remains the most significant issue,” said the chair of the ISM, “as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth.”
If global trade weren’t in such a rut, all of these indexes would likely still be expanding. Thanks, Donald.