ISM New Orders Posts Lowest Reading In Nearly 2 Years

The ISM reported this morning that

The October PMI® registered 57.7 percent, a decrease of 2.1 percentage points from the September reading of 59.8 percent. The New Orders Index registered 57.4 percent, a decrease of 4.4 percentage points from the September reading of 61.8 percent.

On Tuesday I said that “the first thing I am looking for is decelerating growth which will show up in a reading below 15 in the average of  Regional Fed reports, and below 60 in ISM new orders.”

The regional Fed average is still above 15, but this morning we got the reduction in the ISM.

Here’s what the baseline chart for the regional Fed averages (left) and ISM new orders (right) for 2018 now looks like:

JAN   15   65.4
FEB   20   64.2
MAR   16   61.9
APR   17   61.2
MAY   28   63.7
JUN   24   63.5
JUL   24   60.2
AUG   17   65.1
SEP   20   61.8
OCT 18  57.4

While 57.4 is a very positive reading on an absolute scale, nevertheless this was the lowest ISM new orders reading since November 2016, almost two years ago.

I expect slowing to continue.