July ISM mfr’g at 50.9 was well below expectations of 54.5, down from 55.3 in June and the weakest since July ’09. New Orders fell below 50 at 49.2 for the 1st time since June ’09. Backlogs fell 4 pts to 45 and importantly, Employment fell 6.4 pts to 53.5, the lowest since Dec ’09. Export Orders did rise .5 pt to 54 but off the slowest since July ’09. Inventories at both the mfr’g and customer levels fell. Prices Paid fell 9 pts to 57, the lowest since July ’10. Of the 18 industries surveyed, just 10 saw growth. ISM summed up July with this, “despite relief in pricing, however, several comments suggest a slowdown in domestic demand in the short term, while export orders continue to remain strong.” Bottom line, we saw softening in almost all of the regional mfr’g surveys over the past few weeks with today’s only question being to what degree. As I mentioned last week, what today and last week also proves, its the economy that is driving markets and the politics of debts and deficits are just awful noise in the background right now. While some may argue that it is just this noise that is causing the economic slowdown, all we have to do is look at Q1 GDP growth of just .4% to know the US economy was fragile to begin with.
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