Daily Commentary by Larry Baer: The
pace of manufacturing in the U.S.
shrank at its sharpest clip in more than three-years last month. The Institute
of Supply Management said
its index of national factory activity fell to 49.6 in August from 49.8 in
July. The index has been below its neutral threshold of 50.0 for three
consecutive months. The employment
component of the index fell to 51.6%, the lowest since November 2009. New orders, a forward-looking sub-index, fell
to 47.1% last month, the worst showing since April of 2009.
Today's ISM manufacturing index is worrisome
- but it does not yet indicate the economy is in a recession. That important threshold will be reached
should the headline ISM manufacturing index post a reading of 45.0% or
less.
There is nothing contained in this morning's
report likely to make Fed Chairman Bernanke and his fellow members of the
Federal Open Market Committee hesitant to inject the economy with another round
of economic stimulus sooner rather than later - a condition currently very
supportive of the prospects for steady to perhaps fractionally lower mortgage
interest rates.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
