Just as the stock market failed to start off 2016 on the right foot, neither did economic data.  This morning’s ISM report for the month of December came in weaker than expected, falling from 48.6 down to 48.2 compared to consensus expectations for an increase to 49.0.  December’s decline marks the sixth straight month of declines, which is tied for the longest losing streak since November 2004.  All these declines in the ISM Manufacturing report are starting to add up.

010416 ISMMChart

The table below breaks down this month’s report by each of the index’s components.  While the headline index declined, breadth was evenly split between increases and decreases relative to November.  That said, most components are still in contraction mode with seven below 50.  The biggest increase came in Export Orders, which was also the only component that was up more than one point.  On the downside, we saw large declines in Export Orders, Employment, Backlog Orders, and Prices Paid.  Compared to a year ago, though, it is nearly all red arrows as Customer Inventories is the only component that is higher on a year/year basis.

010416ISM Table

As far as the charts of the individual components go, two worth highlighting are Prices Paid and Imports.  In the case of Prices Paid, that component is now at its lowest level since April 2009 and lower than 98% of all other readings since 1949.  This month’s large decline in Import Orders was also notable for the fact that it fell to its lowest level since May 2009 even as the dollar has been rallying.

010416 ISMMChart Prices Paid

010416 ISMMChart Imports

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