Is the ISM manufacturing index overplaying the slowdown?

There are a couple of reasons why the plunge in the ISM manufacturing index in June may be overplaying the extent of the recent slowdown. Even so, the clearer signs that events in Europe and China are becoming a greater drag on the US support our long-held forecast that US GDP will expand by just 2% this year. In fact, the risks to that below-consensus forecast are shifting to the downside.

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