Largest Manufacturing Index Drop Since Oct 2008

I felt like this deserved its own thread.

The December ISM Manufacturing Index dropped 5.2 points. This is the largest drop since Oct 2008, one of only four times it’s dropped over 5 points in a single month since 1984.

January 1984: -9.4 to 60.5%
October 2001: -5.4 to 40.8%
October 2008: -9.0 to 38.2%
December 2018: -5.2 to 54.1%

Not good.

Trade wars are easy to win.

Not trumps fault

If Hillary were president our trade would be at 0%

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This is what winning looks like.

Maybe these are all just poorly managed companies? That seems to be the latest rationalization in the Trump era for everything.

Too much damn winning from fat donald.

Who knew trade wars would be hard?

Ouch. Hard to have any real discussion on it though, given that the premise needs to be “Given that it can’t possibly be Trump’s trade war, …” This is of course even when companies directly say it’s because of the trade war.

Some of the respondent comments are interesting.

“Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.” (Computer & Electronic Products)

“Customer demand continues to decrease [due to] concerns about the economy and tariffs.” (Transportation Equipment)

“Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.” (Food, Beverage & Tobacco Products)

“The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.” (Machinery)

“Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit.” (Miscellaneous Manufacturing)

Anyone else notice a trend here? Lol

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Exactly, respondents from various industries:

Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.” (Computer & Electronic Products)

Brexit has become a problem due to labeling changes.” (Chemical Products)

Customer demand continues to decrease [due to] concerns about the economy and tariffs.” (Transportation Equipment)

Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.” (Food, Beverage & Tobacco Products)

The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.” (Machinery)

Business is steady, but pace of incoming orders are slowing.” (Furniture & Related Products)

Business is robust for certain sectors [aerospace] and flat to downward for others [energy]. Tariffs continue to impact business direction and profit.” (Miscellaneous Manufacturing)

Caution seems to be the outlook. Are we in a correction, or is the market getting ready to slow over time?” (Fabricated Metal Products)

No major change in business operations towards the end of 2018; however, we are carefully monitoring oil prices and outside influence from market conditions to better understand our 2019 outlook and capital plans.” (Petroleum & Coal Products)

Customers are hedge buying in December as a result of announced price increases starting in January.” (Textile Mills)

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Not good? Its terrible.

slowing way down.

and all of a sudden.

bang. consensus was 58% but 54% yikes…

Allan

Beat me to it!

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That’s what happens when you elect democrats… And the fed raised rates for no reason.

Fascinating. Lol

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Blaming out of power dems for a manufacturing slowdown. thats a reach of monumental length.

But par for the course,

blame everyone. and hope it sticks.

Allan

And yet, no respondents gave those reasons.

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This is what happens when you elect talk radio…

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Don’t ruin the false narrative so quickly. It’s like ripping away a blankie that gives comfort to them. Lol

What is the correlation between fed raising rates and a drop in manufacturing index?