The Composite Index of activity in the manufacturing sector reported by the Institute of Supply Management slipped again in February to 55.3. The index has fallen during six of the last seven months. Consensus expectation had been for an increase to 57.0.

During the last twenty years there has been a 69% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.

The new orders component slipped modestly following the sharp January decline to 55.8. The separate index of export orders rose 0.5 points, but the prior month's gain was reversed. The production index reversed all of the prior month's 1.1 point gain and the inventories index cratered 4.2 points to 48.6, the lowest level since last May.

The employment index slipped 0.7 points to 57.4 after the 4.8 point rise in January. During the last twenty years there has been a 69% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.

The prices paid index fell for the fourth straight month, off 3.5 points to 65.6 and down twenty two points from the high last April.

Is there evidence of the new economy in the U.S. GDP data? from the Federal Reserve Bank of Chicago can be found here.