ISM index points to continued moderate growth

The October ISM manufacturing index was a bit weaker than expected (50.8 vs. 52), but it is still consistent with an economy that is growing at a 2-3% rate; it's not even close to what we would expect to see if the economy were entering a double-dip recession.

The employment index was roughly unchanged, and it too remains firmly in territory suggesting continued growth, not recession.

The export orders index declined, and is clearly weak and on the verge of suggesting contraction. However, this index does not have a particularly good record of predicting recessions or conditions in the general economy.

The prices paid index fell sharply and surprisingly, and is clearly in recessionary territory. This could be a reflection of the weakness in commodity prices we have seen in recent months, but otherwise I don't have a good explanation for this, especially since energy prices—and broad commodity indices—rose in October. Weakness in this index typically comes at the end of recessions, as downward price adjustments pave the way for a new period of business expansion.