The first negative surprise in the last eight months was released last week.

After several months of little news to report about the rebound strength of the economy from the pandemic shut down, the data last week broke from that outlook. The ISM Index dropped from above 64 to just over 60. This is a diffusion index with any reading above 50 indicating expansion in the coming months. The drop in April still leaves the index well above the expansion level but not at the record high reported for March. This decline may reflect the problem of increasing manufacturing output from supply chain disruptions and the inability to attract the workers needed to grow production. This condition does lead to higher inflation pressure as many manufactured goods are in short supply.