Economic Indicators – ISM and PMI – What Are They?

I’m sure you’ve heard all the talk in financial media about various “economic indicators”. The so-called experts use these magic numbers to figure out the state of the economy. They tell us whether we’re heading for a recession, or if the economy is about to start growing again.

But what do these numbers actually mean? And do these “experts” know what they’re talking about?

That’s what we’re here to figure out.

This is the first installment of our Economic Indicators series. Our goal is to explain a few of the important economic numbers that you need to understand. We not only want to explore what they mean, but also how you can use them to make money.

In this episode, we talk about the difference between ISM and PMI. We cover what the numbers mean and how to interpret them. And finally, we show how you can use the indicators to generate profits in the market.

Enjoy! Let us know your thoughts and if you would like to see more!

Summary

  • ISM is the organization and PMI is the number they produce
  • PMI above 50 means growth
  • PMI below 50 means contraction
  • PMI is not a holy grail, but it’s a good warning sign for a potential economic recession or depression