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FREE MACRO NUGGET: Are PMI numbers garbage post Covid?

With ISM numbers coming out this week here's a free macro nugget with some reflections on post pandemic PMIs

After the pandemic, PMI numbers such as ISM have been subject to critism due to their weakness in predicting hard data such as industrial production. The reasons behind being many, but it is worth mentioning seasonal adjustments, which have been off, and a negative sentiment due to inflation and supply chain pressures etc. Post pandemic we see that PMI numbers help explain less of US IP. Furthermore the best fit in terms of leads/lag has moved further out into the future. ISM Manufacturing rebounding largely this year may be another head-fake to fade.


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