ISM chart and excerpts below by permission from the Institute for Supply Management® ISM®

Please consider the March 2024 Manufacturing ISM^® Report On Business^® emphasis mine.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

The U.S. manufacturing sector expanded in March, as the Manufacturing PMI^® registered 50.3 percent, up 2.5 percentage points compared to February’s reading of 47.8 percent. “This is first instance of expansion in 16 months. Two out of five subindexes that directly factor into the Manufacturing PMI^® are in expansion territory, up from one in February. The New Orders Index moved into expansion territory after one month of contraction. Of the six biggest manufacturing industries, four (Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; and Transportation Equipment) registered growth in March,” says Fiore. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI^® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the March Manufacturing PMI^® indicates the overall economy grew for the 47th straight month after one month of contraction (April 2020). “The past relationship between the Manufacturing PMI^® and the overall economy indicates that the March reading (50.3 percent) corresponds to a change of plus-2.2 percent in real gross domestic product (GDP) on an annualized basis,” says Fiore.

“There’s Still No Rush” to Cut Interest Rates

Meanwhile, Fed Governor Chris Waller says “There’s Still No Rush” to Cut Interest Rates

Interest rate odds reacted slightly to the data.

CME Fed watch Reaction

The odds of a rate cut in May fell to 0.2 percent, down from 9.3 percent yesterday.

June is more interesting.

The odds of a double cut nearly vanished from 5.2 percent yesterday. The odds of no cut rose to 42.6 percent from 39.6 percent.

Any further good economic news will put the June rate cuts odds under 50 percent.

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