From Torsten Slok:
I’m getting a lot of emails and phone calls from clients following the recession-level ISM number that just came out. It is indeed worrying that manufacturing continues to weaken and it does make us more cautious about Q4 GDP and Friday’s employment number, see the first two charts below. That being said, the service sector still accounts for 85% of the economy, and we still think that the manufacturing sector will not be able to drag down the service sector, see the third chart, but for the Fed, a lot is now riding on the employment report and nonmanufacturing ISM later this week.
Source: Torsten Slok, Ph.D., Deutsche Bank