The ISM’s manufacturing index plunged in June, entering contractionary territory for the first time since the recovery began. June’s reading fell 3.8 points to 49.7, below the expansionary threshold of 50. This month’s report is the first contraction reported since July 2009.
Many of the details in June’s report were weak as well. The new orders index plunged 12.3 points, to 47.8, its biggest drop since 1980. The production index dropped 4.6 points, however, remained in expansionary territory at 51.0.
Employment was the one bright spot in June, falling a modest 0.3 points and remaining at a relatively high 56.6. Employment, however, is a lagging indicator, and may catch up with the other indicators in the next report.
Read the ISM release.