ISM Manufacturing Index stayed in narrowly positive (above 50) territory in September.

FRED Graph

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.

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