Weaker Than Expected ISM Manufacturing Report

Today's ISM Manufacturing report for August came in weaker than expected (49.6 vs 50.0 est) for the fourth straight month, and was below 50 for the third straight month.  The last time the ISM Manufacturing report was weaker than expected was from August through December of 2008.  At a level of 49.6, this month's level was also the lowest since August 2009.

The charts below show the current levels for the ISM Manufacturing report and each of its subcomponents, as well as their levels last month and one year ago.  As shown, even though the ISM headline reading was just slightly below fifty, only three of the index's ten subcomponents managed to stay above the fifty level, which was unchanged from last month.  Compared to a year ago, however, the ISM is considerably weaker.  Last year at this time, only two subcomponents were below fifty, and all but one of the ten are lower now than they were then.  Amidst the weakness, though, even though this month's report showed broad weakness, we did see an increase in the number of industries seeing overall growth and growth in new orders.

Finally, the charts below show the historical charts of each of the ISM Manufacturing Index's ten subcomponents.  The most notable weakness in this month's report was the drop in Production and New Orders which both fell to their lowest levels since the Spring of 2009.

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