Forex Investment and Currency Trading

The ISM index of manufacturing activity fell to 32.4 in December from 36.2 in November, below the consensus forecasts for a more moderate decline. The reading puts the index at levels not seen since 1980, indicating that the manufacturing sector continues to contract at a rapid pace; virtually no industries reported growth in December and only two, apparel and petroleum, indicated stable production conditions. All subcomponents of the index deteriorated: employment dipped to 29.9 from 34.2, suggesting more sizeable job losses in December in manufacturing; new orders went down to 22.7 from 27.9, pointing to downward momentum into January; and production dropped to 25.5 from 31.5. Meanwhile, prices paid continued to fall, declining to 18.0 from 25.5, the lowest reading since 1949, reflecting the dramatic reversal in input cost pressures in recent months. The report confirms that the retrenchment by consumers and slowing growth abroad continue to buffet US manufacturers.