The Manufacturing Purchasing Managers’ Index (PMI) came in at 46.5, below expectations and marking the lowest reading of 2024, a new report from the Institute for Supply Management (ISM) shows. ISM Manufacturing Business Survey Committee chair Tim Fiore joins Seana Smith on Catalysts to break down the results.
“We’re 26 months into a contracting manufacturing environment primarily driven by the new order levels, the demand being non-existent for 26 months, our backlogs at 25 months contracting declines. We don’t have an order book anymore. The order book has all been used up," Fiore tells Yahoo Finance.
"The soft landing has allowed us to consume all that excess ordering and excess inventory over the last couple of years. But we’re waiting for demand to come back [and] as a result of demand not coming back, we’re taking steps on the output side, which is really defined as production and employment and as you can see, that’s really the story for the month."
Weighing in on the data, Fiore finds the number "a little bit surprising, but not totally surprising" due to the impact of Hurricanes Milton and Helene.
Watch the video above for more on what the data signals ahead of the Federal Reserve meeting, the impact of the upcoming election, and the outlook for manufacturing activity.
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