ISM Manufacturing: Slowdown

Bottom Line: ISM's survey-based index of manufacturing managers fell more than consensus expectations but was in line with our forecasts given weak regional surveys since mid-month. June saw new orders contract slightly for the first time since the pandemic. Inventories inched higher as the difference between new orders and inventories suggested further weakness in the coming months. Employment also fell for the second straight month after rising for 8 months. Manufacturing growth has slowed from a robust pace coming into the year to now just "slight to modest" (in the parlance typically used by the Fed). The outlook for manufacturing remains uncertain with risks tilted firmly to the downside amid slower demand at higher prices.