The latest ISM PMI report indicated a production overcapacity problem in the US.

Missing parameter:

Estimated Local New Orders: New orders - New Export Orders = 4.3 - 1.5 = +2.8

Estimated Local Material: Inventories - Imports = 0.5 - (-1.6) = +2.1

There is something weird about this PMI report because many things don't add up.

The new orders increased because of increases in new export orders and local new orders (estimated).  However, the production didn't increase to match the increased orders.  This would mean that the existing production capacity could handle the increased orders.  Furthermore, the increased orders didn't overflow to the backlog of orders.  The backlog of orders dropped instead when the new orders increased while the production decreased.  This phenomenon likely pointed to the production overcapacity problem in the US because the producers could handle the increased orders and clear some backlog of orders simultaneously without any increase in prices.

In conclusion, the ISM PMI has been in contraction for the past 6 months and this doesn't bode well for the US economic, particularly when the higher tariffs take effect.