ISM data surprise

The ISM data came in worse then expected today.  Act surprised.  There has already been plenty of manufacturing data indicating things are not particularly good.  Despite all the pundits claiming the economy is set to surge it is not showing up in the data yet.  Here is a look at the index.

The index is now at the lowest level since 2009.  This is starting to look like more then just a temporary spike down in the data.  But not to worry.  I am sure this is all Sandy's fault.

Here is the new orders index.

New orders dropped again, but are still above 50, if only marginally.  Certainly nothing to write home about.

The exports index is in pretty bad shape.

This is still showing problems in the global economy.  No sign of an uptick in economic activity here yet.

Next up is the employment index.

The employment index has taken a pretty serious dip over the last few months.  It is clearly much worse shape then it was in the recession scare last year.  If this continues I would think it would start to show up in the initial jobless claims before too long.  This is the first time the employment index has been in contraction since the last recession ended.  Does that look like things are getting better to you?

This next chart is new orders minus inventories.

There was a small uptick this month, but not really big enough to tell us much of anything.  It is still  negative and at very low levels.  Will there be any upside follow through next month?

This data does not tell us if we are in recession or not.  It does tell us that manufacturing is still sluggish and has been so for the last six months.  We are now getting to the point where layoffs will become more widespread if there is no significant pickup in new orders very soon.  If that happens it will get even tougher to say we are not in a recession.

Here is a contrary to the we are in a recession view.  Being Early and Being Wrong
I would suggest you look at the charts closely.  There are a bunch of charts in there, but none that I could see that prove anything.  We are starting to get recession blogging wars now, LOL.  The pro recession bloggers are showing data that is consistent with being in a recession.  Anti recession bloggers seem to be saying we have had data like this before while not being in recession.  While what they are saying is true, it does not prove we are not in recession.  The problem is that both sides can find data to support their conclusions at this time.  This is common in the beginning of a recession.  Not all data is going to indicate we are in a recession until long after the recession has started.  That is just the way it is.  I have seen quite a bit of data that suggests we are in a recession.  I am not seeing actual data that is showing significant improvements.  I think we need to see that before we can say the worst of this slow down is over.

Bob