What is the ISM Manufacturing PMI?

What is the ISM Manufacturing PMI?

The Institute for Supply Management (ISM) releases a monthly report of the Manufacturing Purchasing Managers' Index (PMI). The Index is used to measure the level of diffusion based on surveyed purchasing managers in the manufacturing industry. The Index's figures are very easy to detect; while a 50.0 mark stands for a static industry, a reading above it indicates that the industry is expanding. A reading below 50.0 naturally indicates contraction.
The survey is put together by surveying 400 US purchasing managers who are asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories.
Traders should pay special attention to the ISM Manufacturing PMI as it is a leading indicator of economic health. Businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insights into the company's view of the economy.