Manufacturing activity hits 28-year low

Well, equity markets seem to be shrugging off the first bit of horrible economic news in the new year - the steepest contraction in manufacturing activity since 1980.
The Institute for Supply Management's manufacturing index tumbled from 36.2 in November to just 32.4 in December, the lowest level since June of 1980 when the index registered 30.3.

The all-time low for this data series that began in 1948 was reached in May of 1980 at 29.4.

More details are available in this report at Bloomberg - none of them are good.

The ISM’s gauge of new orders dropped to the lowest level since records began in 1948, while export demand was also the weakest since those records started in 1988. The group’s employment index decreased to 29.9 from 34.2 in November.

The gauge of prices paid fell to 18, the lowest level since 1949, reflecting the drop in commodity costs. Economists had projected that the measure, which averaged 65 in 2007, would drop to 20.

All 18 industries tracked by the group contracted last month, the first time that’s happened since Norbert Ore took over as chairman of the ISM’s factory report in 1996.

“We’ve seen a tremendous amount of demand destruction,” Ore said during a conference call with reporters. “There is a significant inventory correction taking place,” he said, and added he couldn’t predict when manufacturing would recover.

It's funny - everything is up today except for gold.