Reply To: Traders Market Weekly: Inflation and Bank Earnings


The ISM Non-Manufacturing Index for December dropped to 49.6% (consensus 55.0%) from 56.5% in November. The dividing line between expansion and contraction is 50.0%.

The key takeaway from the report is that business activity for the non-manufacturing sector, which comprises the largest swath of U.S. economic activity, contracted for the first time since May 2020, reflecting a clear slowdown in economic activity that is a byproduct of rising interest rates and weakening demand.

Factory orders declined 1.8% month-over-month in November (consensus -0.4%) following a downwardly revised 0.4% increase (from 1.0%) in October. Shipments of manufactured goods declined 0.6% month-over-month after increasing 0.2% in October.

The key takeaway from the report is that it shows a clear slowdown in manufacturing activity with declines in new orders for both durable goods and nondurable goods. The 1.8% month-over-month decline in factory orders was the largest since April 2020.