One of last week's economic reports that was "less bad" than expected was the ISM manufacturing report. While we remain in severe contraction territory, the rate of contraction eased slightly in May.
ISM's manufacturing index rose 1.6 points to 43.1, up from an 11-year low of 41.5% in April. This may mean that the worst economic damage from the coronavirus-induced shutdown is over.
The ISM’s indexes for new orders, production and employment all rose, but from exceedingly low levels that show the economy is still shrinking at the sharpest pace in a decade. However slight, this pickup in manufacturing was interpreted by investors as another sign that economic recovery is under way. However, progress is likely to be slow and frustrating, especially if viral infections pick up again.