ISM Manufacturing PMI

The ISM Manufacturing Purchasing Managers' Index (PMI) is a monthly diffusion index that summarizes manufacturing sector conditions. A reading above 50 indicates expansion; below 50 signals contraction.

Why It Matters

The ISM Manufacturing PMI is one of the earliest indicators of economic activity each month, released on the first business day. It surveys over 300 purchasing managers on new orders, production, employment, supplier deliveries, and inventories.

Key Subcomponents

- New Orders: Leading indicator of future output

- Production: Current manufacturing activity

- Employment: Hiring/firing trends

- Supplier Deliveries: Supply chain conditions

- Prices Paid: Input cost inflation

Market Impact

A PMI above 50 is positive for equities and the dollar. A sharp drop below 50 raises recession fears and can trigger significant market moves. The Prices Paid subindex is closely watched for inflation signals.

Official Source

The Institute for Supply Management (ISM) has published this report since 1948, making it one of the oldest economic indicators in the United States.