The ISM manufacturing index fell to 47.7
in December-the lowest level since April 2003. The details
are even more bearish. The new orders subcomponent fell to just 45.7-the lowest since 2001 recession. The production subcomponent also fell sharply and is now well below 50. The only indicator that rose and is at a high level was "prices paid"-an inflation indicator. This again confirms my long held view
that America's economy is falling into stagflation.
Meanwhile, oil prices just keeps
rising which will further depress growth and increase inflation, i.e. make the economy more stagflationary.