ISM Index Plunges Into Troubled Waters

06-01-2011 • ZeroHedge.com

Yesterday we had the biggest monthly drop in the Chicago PMI since the Lehman collapse. Today, the Lehman bankruptcy is invoked again, after the critical ISM Manufacturing index plunges to 53.5, far below expectations of 57.1, and from 60.4 previously: this is the lowest number since September 2009. At this level of "growth" stall , the US economy will be in an official contraction (Sub 50) next month. "Chemical prices are under increasing cost pressure, driven by feedstock and transportation costs." (Chemical Products) "Continued growth through beginning of second quarter, with strong backlog and outlook for at least the next three months." (Electrical Equipment, Appliances & Components) "Business levels remain strong — better than last year by 20+ percent, but not back to 2008 or early 2009 levels." (Fabricated Metal Products) "Demand remains strong; however, inflation is evident everywhere in virtually every material purchased." (Paper Products) "Bad weather is impacting retail business." (Printing & Related Support Activities) "Business is still strong, but we are more aware of a possible softening than previously." (Machinery)