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Please consider the March 2023 Manufacturing ISM^® Report On Business^®

“The March Manufacturing PMI^® registered 46.3 percent, 1.4 percentage points lower than the 47.7 percent recorded in February. Regarding the overall economy, this figure indicates a fourth month of contraction after a 30-month period of expansion. The Manufacturing PMI^® is at its lowest level since May 2020, when it registered 43.5 percent. The New Orders Index remained in contraction territory at 44.3 percent, 2.7 percentage points lower than the figure of 47 percent recorded in February. The Production Index reading of 47.8 percent is a 0.5-percentage point increase compared to February’s figure of 47.3 percent. The Prices Index registered 49.2 percent, down 2.1 percentage points compared to the February figure of 51.3 percent. The Backlog of Orders Index registered 43.9 percent, 1.2 percentage points lower than the February reading of 45.1 percent. The Employment Index continued in contraction territory, registering 46.9 percent, down 2.2 percentage points from February’s reading of 49.1 percent. 

Every component of the ISM is in contraction. Prices are finally in contraction and the ISM suggests the overall economy has been contracting for four months. 

Recession Evidence Mounts 

• March 31: Real Income Was Negative in 2022 Q4, Big Negative Revisions to GDP
• March 29: Money Supply Is Headed for 6th Month of Contraction

MishTalk Video, What's the Real Risk Now, Is it Inflation or Deflation?

Given the obvious inflationary forces, that may seem like a silly question, but please consider this video discussion: What's the Real Risk Now, Is it Inflation or Deflation?

The short answer is Credit Freezes Are Highly Deflationary. See the above link for details and discussion. 

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