ISM PMI
A monthly survey of purchasing managers; readings above 50 indicate expansion and below 50 indicate contraction.
The ISM Purchasing Managers' Index is a monthly diffusion index based on a survey of purchasing managers, published separately for manufacturing and services. Each component asks whether conditions are better, the same or worse than the prior month. A reading above 50 signals expansion in the sector; a reading below 50 signals contraction.
On our site, the headline is shown with its subcomponents, such as new orders, employment and prices. The subcomponents often lead the headline and show where a change is coming from.
Traders care because the PMI is an early indicator of the manufacturing cycle, and its prices and employment components feed into inflation and jobs expectations.
Worked example (illustrative numbers, not real data): the headline falls from 52.0 to 49.5, crossing below 50. New orders drop to 47, which suggests the next readings may weaken further. Traders would read the crossing as an early sign of contraction, not a confirmed one.