Deutsche Bank analysts point out that for the US economy, the warning signs that we got from the Chicago PMI data on Monday turned out to be correct with yesterday’s shocking ISM manufacturing print being the talk of the town in markets.
“The headline was the decade-low September print of 47.8, a 1.3pt decline from August and also well below expectations for a 50.0 reading. In fact it was below even the lowest economist’s forecast on Bloomberg.”
“The details were arguably even more concerning though. New orders (47.3 vs. 47.2 previously), employment (46.3 vs. 47.4) and production (47.3 vs. 49.5) all either remained soft or deteriorated further. Only 3 of the 18 industries in the survey reported growth, the lowest figure since 2009.”
“In addition, the leading indicator new exports component slumped to 41.0. The last time it was lower was during the depths of the GFC in March 2009, and if we look at the full 380 months’ of history, this index has only been lower than it is right now on 6 occasions.”