I look at this.
The ISM Manufacturing PMI (Purchasing Managers' Index), formally the Manufacturing ISM Report on Business, is a monthly economic indicator that measures the health and direction of the U.S. manufacturing sector. Produced by the Institute for Supply Management (ISM), it is one of the most closely watched private-sector gauges of economic activity.52a4f3
What It Measures
Purchasing and supply executives at manufacturing companies answer a survey about changes in business conditions compared to the previous month. The survey covers areas such as:
New orders
Production levels
Employment
Supplier deliveries
Inventories
Prices
Backlogs
New export orders
Imports
Customers' inventories
The headline Manufacturing PMI is a composite diffusion index derived from five equally weighted components (each at 20%): new orders, production, employment, supplier deliveries, and inventories. The other sub-indices provide additional context but do not directly enter the headline calculation.5823c2
How the PMI Is Calculated (Diffusion Index)
Each sub-index is a diffusion index:
Respondents report whether conditions are better (increasing), same (no change), or worse (decreasing).
The diffusion index = (% reporting better) + ½ × (% reporting same).
This produces a value between 0 and 100.
Seasonally adjusted where relevant (for new orders, production, employment, and inventories in the headline PMI).
The headline PMI is the simple average of the five diffusion indices.008eea
How to Interpret the Numbers
Above 50: Manufacturing sector is expanding compared to the prior month. The farther above 50, the stronger the expansion.
Exactly 50: No change.
Below 50: Manufacturing sector is contracting.
For the overall U.S. economy (GDP): A PMI above ~47.5 over time generally signals economic expansion; below 47.5 signals contraction. Manufacturing can contract mildly while the broader economy still grows.e2004b
New orders and production are often viewed as leading indicators within the report, while employment and inventories reflect current conditions. Supplier deliveries above 50 indicate slower deliveries (often a sign of stronger demand or supply constraints).
Why It Matters
Manufacturing, though a smaller share of U.S. GDP than services, is highly cyclical and sensitive to interest rates, trade policy, consumer/business spending, and global demand. The ISM PMI is a leading indicator—it often turns before official data like industrial production or GDP.
Markets react strongly to surprises:
Stronger-than-expected PMI → generally bullish for stocks (especially cyclicals), the U.S. dollar, and can pressure bonds (higher yields).
Weaker-than-expected → opposite reaction.
It also informs Federal Reserve policy decisions, corporate earnings outlooks, and supply-chain planning.
Release Schedule
The ISM Manufacturing PMI is released on the first business day of each month at 10:00 a.m. ET, covering the prior month's data. (The Services PMI follows on the third business day.)dfa937
Recent Data (as of early April 2026)
February 2026: 52.4 (down slightly from 52.6 in January; second consecutive month of expansion).
New orders: 55.8 (expanding, but slowed)
Production: 53.5 (expanding, slowed)
Employment: 48.8 (still contracting)
Inventories: 48.8 (contracting)
Supplier deliveries: 55.1 (slower deliveries)
Prices: 70.5 (sharp jump, highest since 2022; input cost pressures rising)
Four of the six largest manufacturing industries expanded in February. The report noted continued overall economic expansion.410993
The next release (March 2026 data) is expected around April 1, 2026.
ISM PMI vs. S&P Global (formerly IHS Markit) PMI
There are two main U.S. manufacturing PMIs, and they sometimes diverge:
ISM: Survey of ~400 purchasing/supply executives at ISM member companies (often larger, established firms). Equal weighting of five components. Longer history. Can be more volatile.
S&P Global PMI: Broader sample (~800–1,200 companies, including smaller firms.
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