Just to summarise quickly what the ‘Purchasing Manager Index’ is, it’s a monthly data release by the ISM. PMI data is based on 5 survey areas: new orders, inventory levels, production, supplier delivery & employment.
PMI data ranges from 0-100. A PMI reading ABOVE 50 represents expansion in the economy. Whereas, a reading BELOW 50 represents contraction.
Below is the PMI data for March 2023, which came in at 47.7 which shows the economy is contracting. Now to show the importance of this, let me show you the last few times the PMI dropped below 50👇🏻
2008 - The Financial Market Crash🩸
Early 1980’s - Sky High Inflation🩸
Mid 1980’s - Recession which left unemployment at 7.5%. The recession was caused by tight monetary policy from the government , in an ‘effort’ to fight high inflation🩸
PMI data ranges from 0-100. A PMI reading ABOVE 50 represents expansion in the economy. Whereas, a reading BELOW 50 represents contraction.
Below is the PMI data for March 2023, which came in at 47.7 which shows the economy is contracting. Now to show the importance of this, let me show you the last few times the PMI dropped below 50👇🏻
2008 - The Financial Market Crash🩸
Early 1980’s - Sky High Inflation🩸
Mid 1980’s - Recession which left unemployment at 7.5%. The recession was caused by tight monetary policy from the government , in an ‘effort’ to fight high inflation🩸