By Karl Smith
ISM Manufacturing Index stayed in narrowly positive (above 50) territory in September.
Given the decline in gasoline prices and what I have seen on the auto sales front we should expect this gauge to trend upwards in the coming months.
In a practical sense a recession is a contraction in manufacturing and construction. There is no indication at the moment that construction is headed for contraction and the probability that manufacturing is contracting is headed downward.
Thus, I believe a double-dip becoming less likely.
My gut always thought this was the right answer, but the numbers did, and to to a large extent still do, look disconcerting.