Monday, March 03, 2008
The nation's broadest measure of manufacturing activity, the ISM Manufacturing Index, plunged back below the expansion/contraction line in February for the second time in three months, close to the five year lows reached in December.
A rebound like the one seen early last year doesn't appear to be in the cards for 2008. Given how other economic indicators have deteriorated lately, a further plunge into the low forties sometime in the months ahead seems to be the more likely outcome, as was the case early in 2001.
Recall that a level of 50 delineates expansion from contraction and noone starts to really worry about the ISM numbers until they drop below 45.
Declines were seen in production (down 4.5 points), inventories (down 3.7 points), vendor deliveries (down 2.7 points), employment (down 1.1 points), and new orders (down 0.4 points).
Prices were stable, dropping from 76.0 to 75.5 and new export orders fell from 58.5 to 56.0, the only items that remained above the 50 mark.
Those looking for good economic news this week will probably be disappointed - the most important economic report of them all, the labor report, comes out on Friday and only the most optimistic analysts are looking for a big rebound from last month's loss of 17,000 jobs.