Wow, what a terrible number.  On the back of the Q1 revision of GDP, and poor Q2 GDP - along with deteriorating unemployment data, one wonders if the economists are going to look back at this period and say we are back in recession.  (not the 'technical recession' of two quarters of 'official GDP' being negative)

ISM Manufacturing tumbled to 50.9 from 55.3, and versus the 54.3 expectation.  50 is the line between expansion and contraction.

New orders came in below 50 at 49.2; first contraction since June 2009.

Employment dumped from  59.9 to 53.5.

Once more prices paid dropped dramatically but its a steep price to pay for lower inflation.

The market turned the premarket surge into a selloff.

WHAT RESPONDENTS ARE SAYING ...
  • Inflation pressures have finally slowed down. (Chemical Products)
  • With products sold internationally, the business conditions we are currently experiencing are declining from abnormally [high] record-breaking levels. Business conditions are currently flattening to more normal volumes, while trending slightly downward. (Machinery)
  • Market conditions — Europe weak, U.S. soft, Asia strong. (Computer & Electronic Products)
  • Demand from automotive manufacturers continues to improve. (Fabricated Metal Products)
  • Export sales very strong, while domestic sales are sluggish. (Paper Products)
  • The looming debt ceiling has government agencies backing away from spending. Forecasting a slowdown in demand in the short term. (Transportation Equipment)
  • Generally seeing a slowdown, which is typical this time of year. Hopeful that this is seasonal only. (Plastics & Rubber Products)
  • Most industrial customers seem to be sustaining their business. Export orders continue to remain strong. Price pressures persist, especially with commodity materials. (Chemical Products)
MANUFACTURING AT A GLANCE

JULY 2011

Index

Series

Index

Jul

Series

Index

Jun

Percentage

Point

Change

Direction

Rate

of

Change

Trend*

(Months)

PMI50.955.3-4.4GrowingSlower24
New Orders49.251.6-2.4ContractingFrom Growing1
Production52.354.5-2.2GrowingSlower26
Employment53.559.9-6.4GrowingSlower22
Supplier Deliveries50.456.3-5.9SlowingSlower26
Inventories49.354.1-4.8ContractingFrom Growing1
Customers' Inventories44.047.0-3.0Too LowFaster28
Prices59.068.0-9.0IncreasingSlower25
Backlog of Orders45.049.0-4.0ContractingFaster2
Exports54.053.5+0.5GrowingFaster25
Imports53.551.0+2.5GrowingFaster23
OVERALL ECONOMYGrowingSlower26
Manufacturing SectorGrowingSlower24

*Number of months moving in current direction.