ISM Manufacturing PMI
A monthly survey of U.S. manufacturing purchasing managers that indicates whether factory activity is expanding or contracting.
Full explanation
The ISM Manufacturing PMI is a headline indicator from the Institute for Supply Management’s monthly Manufacturing PMI Report. It is based on survey responses from purchasing and supply managers across U.S. manufacturing industries. The index summarizes whether key areas of factory activity are improving, unchanged or worsening compared with the previous month. A level above 50 generally points to expansion, while a level below 50 points to contraction.
Why traders watch it
Because it is released early in the month, the ISM Manufacturing PMI can shape the first market view of U.S. growth momentum for the prior month. It is especially relevant when investors are reassessing the business cycle, inflation pressure, inventory swings or Federal Reserve policy expectations.
Market interpretation
- FX
- USD can react if the report changes expectations for U.S. growth or interest-rate differentials.
- Rates
- Treasury yields may move when the release alters views on activity, inflation pressure or Federal Reserve policy.
- Equities
- Cyclical sectors and index futures may respond to changes in manufacturing demand, orders and cost pressure.
- Commodities
- Industrial commodities may react if the report changes perceptions of U.S. factory demand.
Stronger vs weaker outcomes
A higher-than-expected ISM Manufacturing PMI may suggest stronger factory momentum, firmer demand or improved business conditions.
A lower-than-expected ISM Manufacturing PMI may suggest weaker manufacturing momentum, softer orders or more cautious industrial conditions.
For the ISM Manufacturing PMI, above 50 generally signals expansion versus the prior month and below 50 signals contraction.
Typical volatility
High. The release can generate fast moves because it is timely, widely followed and includes market-sensitive sub-indexes such as prices paid, new orders and employment.
Trading considerations
- Check the headline level against consensus, but also review new orders, employment, inventories and prices paid.
- Watch whether the report confirms or conflicts with regional Fed surveys, industrial production and durable goods orders.
- Be aware of spread widening and rapid repricing around the 10:00 a.m. Eastern Time release window.
- Consider revisions to seasonal factors or changes in sub-index composition when comparing long time series.
Educational guidance only — never a trading signal or recommendation.
Related indicators
China National Bureau of Statistics Manufacturing Purchasing Managers' Index
China NBS Manufacturing PMI is an official survey measure of conditions in China’s manufacturing sector. A reading above 50 generally indicates expansion, while a reading below 50 indicates contraction.
Federal Reserve Bank of Richmond Fifth District Manufacturing Composite Index
The Richmond Fed Manufacturing Index is a monthly gauge of factory activity in the Fifth Federal Reserve District. It summarizes whether surveyed manufacturers report improving or worsening conditions compared with the prior month.
Federal Reserve Bank of Richmond Fifth District Manufacturing Shipments Index
The Richmond Fed Manufacturing Shipments Index tracks whether manufacturers in the Fifth District are shipping more or less than in the previous month. It is one component of the Richmond Fed manufacturing survey.