About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, January 09, 2012

Economic Indicator -- Delivery Delay

In a robust economy delays of materials and goods to manufacturers rises as vendors struggle to
meet demand. In a downtrending or weak economy, manufacturers experience far fewer delays
as vendors have supplies and are eager to ship. The ISM provides a monthly reading of % of
purchasing managers experiencing delays in deliveries of materials. ISM D / D % Chart

the D / D % for mfrs. has dropped to below 50% for the first time since the economic recovery
began in 2009. That is a warning sign of slower orders in the system. Note that the series is
volatile and does give false signals. Even so, it is a decent indicator of longer term trend and we
have to watch it carefully now to see if  a recovery of delivery delays is on tap or whether
economic momentum is set to remain sluggish.

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