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Today, new statistics on the US manufacturing sector were released, and overall, the picture shows that the industry remains in contraction. ISM indices again fell below the growth threshold and simultaneously weaker than expectations.

Key Indicators

ISM (PMI) Manufacturing Index — 48.2

The forecast was higher — 49.0. The previous figure was 48.7.

A value below 50 indicates a decline in activity and a slowdown in the manufacturing sector.

ISM price index — 58.5

Slightly below the forecast (59.5), almost matching previous levels.

Prices remain elevated, indicating ongoing inflationary pressure in production.

New orders index — 47.4

Forecast — 49.4.

A decline in new orders is a worrying signal. It indicates that demand from businesses is weakening.

Employment index — 44.0

Expected 46.0.

The sector continues to cut jobs, reflecting overall caution among companies and a decrease in capacity utilization.

What does this mean for the economy

It is important for newcomers to understand: the level of 50 is the boundary between growth and contraction.

When the indices drop below, it indicates that:

– production is slowing down

– demand for new products is weakening

– companies are managing personnel more cautiously

– pressure on economic growth is intensifying

Current values indicate that the manufacturing sector remains in a slowdown phase with no signs of a sharp recovery.

How might this affect the markets?

Stock market

– Weak indicators strengthen expectations for a softer Fed policy.

– stocks of cyclical companies and the industrial sector may face pressure.

– The technology sector often reacts more neutrally, as it is primarily sensitive to liquidity and rates.

Cryptocurrency market

– For crypto, such data can be moderately positive, as it increases the likelihood of softer financial conditions in the future.

– However, the short-term effect is usually limited as investors await confirmations from other macro indicators and Fed statements.

Conclusion

The manufacturing sector remains weak: new orders are falling, employment is reduced, and activity is below the growth threshold.

The data strengthens arguments for a gradual easing of Fed policy next year. For the markets, this means uncertainty in the short term but potential support in a longer horizon due to future easing measures.