ISM Numbers Are Weak Before QE3 Cash Begins To Flow

Updated 12/3/12 The October headline seasonally adjusted aggregate Purchasing Managers Index reading of 49.5 fell far short of the consensus expectation of 51.2. I track the not seasonally adjusted ISM Manufacturing New Orders index as the kernel of the measure of manufacturing conditions in the US. It  fell from 61.8 in October to 53.3 in November. November was a down month in 8 of the past 10 years in the NSA New Orders Index and every year since 2005. The average month to month change over the previous 10 years was -3.3. Last year the reading was -2.6 and in 2010 it was -5.7. In that context this year’s decline was not only worse than average, but the worst since November 2007 and 2008, with drops of -8.8 and -8.6 respectively. The slide that began after the 2009 peak  is continuing. The index is now 5 points lower than last year at this time. This is an acceleration of the pr...