Calling it “unexpected,” Reuters reported that the Purchasing Managers Index (PMI) from the Institute for Supply Management for November fell to its lowest level in over three years. A poll of economists by Reuters showed they didn't see it coming.
The PMI covers the private sector and quizzes 400 purchasing managers in 18 different manufacturing sectors to get their view of market conditions from their perspective: better than last month, same as last month, or worse, along with any comments they wish to make. Any reading above 50 indicates the sector is growing, and below that it’s contracting.
Bradley Holcomb, the chairman of the survey committee, said:
The PMI registered 49.5 percent, a decrease of 2.2 percentage points from October's reading of 51.7 percent, indicating contraction in manufacturing for the fourth time in the last six months. This month's PMI reading reflects the lowest level since July 2009 when the PMI registered 49.2 percent.
The New Orders Index registered 50.3 percent, a decrease of 3.9 percentage points from October, indicating [slowing] in new orders for the third consecutive month.
The Employment Index registered 48.4 percent, a decrease of 3.7 percentage points, which is the index's lowest reading since September 2009 when the Employment Index registered 47.8 percent.
Holcomb noted that unsolicited comments from the purchasing managers also reflect the slowdown:
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