Economic contraction continues with a spate of economic releases, and they were all disastrous.  But they also helped Jay Powell’s dovish tilt.

The problem is it’s still all bad news. Still, there is an urge to get through inflation, and onto recession, and then back to even economic keel (after Fed rate cuts).

The ISM manufacturing index fell to 52.8 in July – the lowest since June 2020, paced by a monster decline in prices paid to 60 from 78.5.

·         Production slowed from 51.0 to 50.7

·         New orders fell from 49.2 to 48.0

·         Employment rose from 47.3 to 49.9

·         Supplier deliveries fell from 57.3 to 55.2

·         Inventories rose from 56.0 to 57.3

·         Prices paid fell from 78.5 to 60.0

US PMI came in at the lowest level in two years, as output and new orders fell in July.

Chris Williamson, the Chief Business Economist at S&P, said: “with the exception of pandemic lockdown periods, July saw US manufacturers report the toughest business conditions since 2009.”  For me it’s the pace of decline that’s the real story – your thoughts?

And US construction swooned 1.1%, the street was looking for a slim gain.

The markets have given up earlier gains and are now in the red.