ISM PMI (November) indicated that US economy was having a diminishing marginal growth.

The prices had decreased to 82.4 (-3.3) but still remained at an elevated high because of persistent high freight costs, high crude prices, and high material prices which still maintained the supplier’s deliveries at a high level of 72.2 (-3.4) as a higher number indicated slower deliveries. The producers had a reduction in their inventories (56.8, -0.2) because of freight issues and higher costs. Consequently, the producers increased their imports (52.6, +3.5) and reduced their local raw materials (Estimated -3.7) to defray some costs.

The producers increased their employment (53.3, +1.3) to hike their production to 61.5 (+2.2) because of dwindling customers’ inventories (25.1, -6.6) which were used to meet existing consumer’s demands. However, all the orders were declining which showed that consumers were cutting back on their spendings due to the high inflation.

All the above factors caused the PMI to increase to 61.1 (+0.3) in November but the surge was deemed to be unsustainable because the producers were losing their confidence in the new export orders and local orders because of declining consumer spendings and personal savings rate (7.3%, lowest in 1 year).

In conclusion, the November PMI indicated that the US economic growth was already over the peak and would experience a diminishing marginal GDP growth in the future.