The Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) is a widely followed economic indicator that measures the health of the manufacturing sector in the United States. The PMI is based on a survey of purchasing managers in the manufacturing industry, who are asked to rate various aspects of their business, such as new orders, production, employment, and supplier deliveries. A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction.
In March 2020, the ISM Manufacturing PMI fell to 46.3, missing expectations of 47.5 and marking the lowest reading since June 2009. This sharp decline was largely attributed to the outbreak of the COVID-19 pandemic, which has disrupted global supply chains and caused widespread economic uncertainty.
The new orders index, which measures demand for manufactured goods, fell to 42.2 in March, down from 49.8 in February. This was the lowest reading since March 2009 and indicated a significant contraction in demand. The production index also fell sharply to 47.7, down from 50.3 in February, indicating a decline in output.
The employment index also fell to 43.8 in March, down from 46.9 in February, indicating a contraction in manufacturing employment. This was the lowest reading since March 2009 and suggests that manufacturers are cutting jobs in response to weaker demand.
The supplier deliveries index, which measures the speed of deliveries from suppliers to manufacturers, rose to 65.0 in March, up from 57.3 in February. This increase suggests that suppliers are struggling to keep up with demand for certain goods, possibly due to disruptions caused by the COVID-19 pandemic.
Overall, the March ISM Manufacturing PMI suggests that the manufacturing sector in the United States is contracting at a rapid pace due to the COVID-19 pandemic. The decline in new orders, production, and employment is likely to have a significant impact on the broader economy, as manufacturing is a key driver of economic growth. Policymakers will need to take swift action to support the manufacturing sector and prevent a deeper recession.
- SEO Powered Content & PR Distribution. Get Amplified Today.
- PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
- Source: Plato Data Intelligence: PlatoData
Clarida Expects No Fed Blackout and Forecasts One or Two Rate Hikes Ahead, According to Forexlive.
Richard Clarida, the Vice Chairman of the Federal Reserve, recently stated that he does not expect a Fed blackout and...