ISM Manufacturing PMI

On Tuesday's (US) ISM Manufacturing PMI...

The results of this survey for August were not just lousy. They were bad on a special kind of level that renewed the recessionary, and "hard landing" talk up and down Wall Street. The headline print hit the tape at 47.2, which is deep in contractionary territory. This was the fifth consecutive month for headline-level contraction for the series, and incredibly... the 21st month of contraction in the last 22. New Orders, which is the most important subcomponent in any manufacturing-focused survey, plummeted all the way to 44.2, also a fifth consecutive month of contraction.

Going down the list, Production dropped to 44.8, Employment printed at 46, for a third consecutive month of declining manufacturing-based employment and Order backlog fell all the way to 43.6. For those who are not familiar with this kind of survey, 50 is the line between expansion and contraction, and once the numbers reach levels lower than a rough 47.5 or so, they really represent a screeching slowdown. To slow down each month from the month prior and to still be slowing down at this pace almost two years into the slide is simply jaw-dropping.

Didn't anything important go up? Oh, you bet your tail something did. Prices not only printed in expansion from the month prior for an eighth straight month, but pricing accelerated to 54 from July's 52.9. This puts a serious wrench in the market's plans for a sustained easier trajectory for monetary policy. The Fed simply cannot tackle both of its mandates... full employment and price stability if both need attention at the same time.