Another Indicator in the Danger Zone

Aside from the fact that the Institute for Supply Management’s manufacturing index remained below 50% for the third straight month, indicating that the U.S. factory sector is in trouble, the ratio of the ISM new orders sub-index to the headline index has slid towards levels that have often coincided with broad economic downturns. Admittedly, there have been a few false signals over the past three decades, but given other reports we’ve seen lately, today’s data lends further weight to the notion that the U.S. economy is heading south.