by Calculated Risk on 5/01/2020 10:05:00 AM

The ISM manufacturing index indicated contraction in April.  The PMI was at 41.5% in April, down from 49.1% in March. The employment index was at 27.5%, down from 43.8% last month, and the new orders index was at 27.1%, down from 42.2%.

From the Institute for Supply Management: April 2020 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector contracted in April, and the overall economy contracted after 131 consecutive months of expansion, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

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 April PMI® registered 41.5 percent, down 7.6 percentage points from the March reading of 49.1 percent. The New Orders Index registered 27.1 percent, a decrease of 15.1 percentage points from the March reading of 42.2 percent. The Production Index registered 27.5 percent, down 20.2 percentage points compared to the March reading of 47.7 percent. The Backlog of Orders Index registered 37.8 percent, a decrease of 8.1 percentage points compared to the March reading of 45.9 percent. The Employment Index registered 27.5 percent, a decrease of 16.3 percentage points from the March reading of 43.8 percent. The Supplier Deliveries Index registered 76 percent, up 11 percentage points from the March reading of 65 percent, limiting the decrease in the composite PMI®.
emphasis added

This was slightly above expectations of 36.7%, but the declines in new orders and employment were even worse than the headline. This suggests manufacturing contracted sharply in April.