ISM manufacturing PMI

What this actually is

A monthly survey asking purchasing managers at factories whether orders, production, hiring and prices went up or down. Above 50 means more said up than down; below 50 means contraction. It arrives on the first business day of the month, before any hard data.

Why it matters to a person

Manufacturing is only about 10% of US employment but a much larger share of the market's cyclical earnings. New orders lead industrial profits by roughly two quarters, and the prices-paid component is an early inflation warning that arrives weeks before CPI.

For scale

Spent most of 2022–24 below 50 without a recession — the longest such stretch on record — because the services economy kept growing. That divergence is itself the story of the era.

How to read a release

The mechanism

New orders lead industrial earnings by two quarters; prices paid is an inflation early warning.

What to watch: Headline; new orders; prices paid. Arrives first business day monthly; the effect typically lasts days. Impact tier 2 — Directional: Moves the index for days or weeks. Scheduled data releases, policy decisions, global spillovers, and the prices of money and energy. This is the tier most professional attention is spent on.

Primary source — ismworld.org ↗