The Institute for Supply Management’s (ISM) U.S. manufacturing imports reading dropped to 39.9 in May, the lowest level since March 2009, as the effects of elevated tariffs begin to materialize. A reading above 50 signals growth while a reading below 50 signals contraction. The lower import volumes were led by paper products, textile mills, and computer & electronic products.
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“Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,” said Chair of the ISM Manufacturing Business Survey Committee Susan Spence.
Lower Imports Pose Negative Effects for the Stock Market
The low reading signals that businesses are reducing imports as tariffs start to drive up prices. This could potentially lead to shortages, reduced business activity, and higher prices, all of which create negative effects for the stock market. It could also lead to supply chain disruptions and production delays.
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