January 2009 U.S. ISM Manufacturing

Manufacturing activity in the U.S. dropped at a slower pace in January after falling to its weakest level in 28-years during the previous month, and economic activity in the region is likely to remain subdued in the months ahead as businesses continue to face fading demands from home and abroad. The ISM index increased to 35.6 from a revised reading of 32.9 in December as new orders increased to 33.2 from a record-low of 23.1 in the previous month. A deeper look at the report showed that new export orders increased to 37.5 from 35.5, while inventories slipped to 37.5 from 39.6, which is the lowest since July 2001, and conditions are likely to get worse throughout the first half of the year as the world’s largest economy faces its longest recession in over a quarter century. As turmoil in the banking sector intensifies while the outlook for growth and inflation falter, the Fed is likely to step up its efforts as policy makers attempt to steer the economy out of a deepening