The ISM reported the other day that
The October PMI® registered 57.7 percent, a decrease of 2.1 percentage points from the September reading of 59.8 percent. The New Orders Index registered 57.4 percent, a decrease of 4.4 percentage points from the September reading of 61.8 percent.
On Tuesday I said that “the first thing I am looking for is decelerating growth which will show up in a reading below 15 in the average of Regional Fed reports, and below 60 in ISM new orders.”
The regional Fed average is still above 15, but this morning we got the reduction in the ISM.
Here’s what the baseline chart for the regional Fed averages (left) and ISM new orders (right) for 2018 now looks like:
FEB 20 64.2
MAR 16 61.9
APR 17 61.2
MAY 28 63.7
JUN 24 63.5
JUL 24 60.2
AUG 17 65.1
SEP 20 61.8
OCT 18 57.4
While 57.4 is a very positive reading on an absolute scale, nevertheless this was the lowest ISM new orders reading since November 2016, almost two years ago.
I expect slowing to continue.