ISM Manufacturing Index vs. U.S. Gross Domestic Product

Friday, February 02, 2007 | 01:15 PM

GDP data came in hot Wednesday, but ISM / Chicago PMI both came in very weak, near recessionary levels. As the nearby chart shows, ISM leads GDP -- up and down. 

The steady downtrend since December 2003 and this month's dip below 50 in the ISM index point to a weaker U.S. economy in the months ahead.

ISM Manufacturing Index vs. U.S. Gross Domestic Product
(Quarterly, ISM Data through Feb-07)

Ismgdp


Chart courtesy of Michael Panzner

Friday, February 02, 2007 | 01:15 PM | Permalink | Comments (10) | TrackBack (0)
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Comments

ISM at or below 50 means a contracting manufacturing sector. BUT It may not mean a contracting economy as a whole. Even the chart shows that ISM=50 is associated with economic growth better than 2%. I think a lot of people miss that historic fact.

Posted by: js | Feb 2, 2007 1:32:05 PM

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