Latest / Markets with Megan: A Quick Financial Markets Update / ISM in Contraction - Should We Worry? | S2 E102 | 12-01-25

Transcript

ISM in Contraction - Should We Worry? | S2 E102 | 12-01-25 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The government's catching up to their regular schedule with releasing economic data.
• 0:05
  Megan Horneman: It's Monday, December the 1st, and this is Markets with Megan.
• 0:08
  Megan Horneman: If you like this podcast, you can subscribe to it.
• 0:11
  Megan Horneman: Hit the alarm bell.
• 0:12
  Megan Horneman: Also share it with friends, your family, or colleagues, anybody who's interested in those economic data releases that we get and what that means for the market.
• 0:21
  Megan Horneman: Well, on the first of every month, we start the month off with the ISM Manufacturing Report.
• 0:25
  Megan Horneman: And this month we saw that the ISM Manufacturing Index was actually worse than expected for the month of November.
• 0:33
  Megan Horneman: It came in in contraction territory again at 48.2.
• 0:38
  Megan Horneman: This has been in contraction territory for a consistent amount of time.
• 0:43
  Megan Horneman: So it hasn't necessarily bled into GDP, but let's look at the underlying details because this is where we get more information about other aspects of the economy.
• 0:53
  Megan Horneman: First of all, there was weakness in new orders, the backlog of orders, and then delivery times.
• 0:59
  Megan Horneman: So businesses, what that tells you is that businesses aren't necessarily getting a ton of new orders, but they're also have cleared out backlogs and they're not lacking, they're not slow on the delivery times.
• 1:10
  Megan Horneman: Employment, this is important because the Fed's going to be looking at any kind of indicators on employment.
• 1:16
  Megan Horneman: The employment component fell um the most since March.
• 1:20
  Megan Horneman: It's now sitting deeply in contraction territory, the lowest we've seen since August.
• 1:25
  Megan Horneman: Now there was an increase in production that rose to a four-month high.
• 1:29
  Megan Horneman: So that's actually good for GDP.
• 1:32
  Megan Horneman: But when you look at some of the other parts of this report, imports saw a pretty big surge.
• 1:37
  Megan Horneman: They outstripped the game we saw in new export orders.
• 1:41
  Megan Horneman: So that's actually negative for GDP.
• 1:43
  Megan Horneman: And then the inflation indicator that the Fed's going to watch, the prices paid, that actually rose to a four-month high.
• 1:51
  Megan Horneman: We don't know exactly what drove that higher.
• 1:53
  Megan Horneman: It may have something to do with the higher imports, and we do know there are tariffs.
• 1:57
  Megan Horneman: This may be partly to do with it, but we do know that's not a good sign for the future of inflation.
• 2:04
  Megan Horneman: That's all we have today.
• 2:05
  Megan Horneman: If you want a history of our podcast, you go to marketswithmegan.fm.
• 2:08
  Megan Horneman: Thank you.