ISM mfr'g still weak, bad news is bad news now, and vice versa

The August ISM manufacturing index was little changed m/o/m at 47.2 vs 46.8 in July and 48.5 in June and thus remaining in contraction. The 6 month average is now 48.5. The bottom line, with numbers and anecdotes below to corroborate, is US manufacturing remains in a recession with little sign that the situation will change any time soon, but we’ll of course see to what extent, if much at all, some rate cuts will help result in some more activity. As for the stock market, we’re seeing more evidence that bad economic news is bad for stocks, and vice versa. Treasury yields are at the lows of the morning.

New orders softened further to 44.6 from 47.4 and that is the weakest since May 2023. Backlogs were less bad at 43.6 vs 41.7 but still well under 50. Inventories bounced back to 50.3, the first time above 50 since January 2023 while those at the customer level was up 2.6 pts to 48.4. Export orders fell a touch to 48.6 but below 50 for the 4th month in the past 5. Prices paid was up 1.1 pts m/o/m to 54, a 3 month high but still below its 6 month average of 55.5. Employment was up 2.6 pts but still in contraction at 46. Finally, supply chains are seemingly pretty normal with deliveries at 50.5, though we know there has been some front loading of deliveries for those who rely on ocean shipping.