ISM’s Disappointing Report Could Force Ben Bernanke’s Hand

The Institute of Supply Management (ISM) reported today that U.S. manufacturing activity contracted for the third consecutive month, as judged from its PMI index which read 49.6 for August. This compared unfavorably with the ISM index for July which was 49.8. It was also the lowest reading recorded in three years.

The ISM New Orders Index registered 47.1 percent, a fall of 0.9 percent from the July reading. This metric also fell for the third month on the trot. The Production Index printed 47.2 percent, which also decreased over July by 4.1 percent, and was down...