GDP data came in hot Wednesday, but ISM / Chicago PMI both came in very weak, near recessionary levels. As the nearby chart shows, ISM leads GDP — up and down.
The steady downtrend since December 2003 and this month’s dip below 50 in the ISM index point to a weaker U.S. economy in the months ahead.
ISM Manufacturing Index vs. U.S. Gross Domestic Product
(Quarterly, ISM Data through Feb-07)
Chart courtesy of Michael Panzner