Stock Market Falls as Slowing Manufacturing Numbers Cause Recession Fears
The stock market continued its three week dip yesterday as the S&P 500 fell 1.8% following the release of contracting manufacturing numbers. The Institute for Supply Management (ISM) reported a PMI, or Purchasing Manufacturer’s Index, of 47.8% for the month of September, contracting 1.3% from August’s PMI of 49.1%. The PMI is a composite measurement based upon five indicators across the manufacturing industry: new orders, production, employment, deliveries, and inventories. A PMI of “above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining.” September’s PMI of 47.8% “is the lowest reading since June 2009, the last month of the Great Recession, when the index registered 46.3 percent.” Chair of the ISM Tim Fiore commented that September’s manufacturing numbers “corresponds to a 1.5-percent increase in real gross domestic product (GDP)”. GDP for Q2 of 2019 had been a 2.1% increase, down from the Q1 GDP increase of 3.1%.