Thursday, November 15, 2018

Initial markers for a manufacturing slowdown now hit

 - by New Deal democrat

I have a new article that hopefully will get posted by Seeking Alpha later today.  In the meantime ...

Two weeks ago I wrote an article establishing a manufacturing baseline for my forecast of an economic slowdown by about the middle of next year. I concluded that by saying:
the first thing I am looking for is decelerating growth which will show up in a reading below 15 in the average of  Regional Fed reports, and below 60 in ISM new orders.
The ISM new orders index did fall below 60 to a new nearly 2 year low (but still positive!) at the beginning of this month.

As of this morning, the average of the five Fed regional new orders indexes also declined from 18 to 15*, as the Empire Fed index fell slightly (from 22.5 to 20.4), and the Philly Fed index fell substantially (from 19.3 to 9.1).

This could of course all be noise, but I've made a forecast, I've laid down some markers, and the data is - at least on an initial basis - hitting those markers.

*(okay, technically not "below" 15, but close enough).