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Everything You Need To Know About PMIs
The Macro Institute's Weekly Economic Primer
The Macro Institute
January 05, 2026
In partnership with
Don’t have time to watch the whole video? Here’s 5 Key Takeaways:
🔹 PMIs Are An Early Read On Economic Activity: PMIs are great leading indicators of future economic trends because they measure subtle changes occurring in the early stages of the economic supply chain.
🔹 PMIs Are Amongst Most Widely-Followed Series: Given it’s long and impressive track record as a gauge of future economic activity, the ISM Manufacturing Index is one of the most frequently used series to monitor the business cycle.
🔹 The ISM New Orders Subcomponent Is Particularly Useful: As the most leading subcomponent of the ISM Manufacturing Index, the New Orders subcomponent gives the earliest heads up on changes in economic activity.
🔹 PMIs Are Proxies Of Many Financial Indicators: The ISM Indices can be used as proxies for many series including the business cycle, stocks, equity leadership, volatility, yields, financial risks, and more.
🔹 ISM Manufacturing Index Is Superior To ISM Services Index: Due to its much longer history, smaller year-end revisions, and better correlation with key series, the ISM Manufacturing Index is preferred over its Services counterpart.
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Macro Data Center
The Macro Week Ahead
📆 Last Week’s Data Key Takeaways
🔹 Housing Demand Firmed: Pending Home Sales jumped +3.3% m/m in November (+2.6% y/y), a much stronger print than expected and the highest level since early 2023. This suggests better affordability/inventory dynamics are finally showing up in activity.
🔹 Home Prices Still Rising, But Cooling: Case-Shiller (+1.4% y/y) and FHFA (+1.7% y/y) both signaled that the housing market remains cool, but has not completely rolled over.
🔹 National PMI Still In Expansion, But Slowing: S&P Global Manufacturing PMI came in at 51.8 in December (down from 52.2). The expansion continues, but momentum softened into year-end.
🔹 “No Fire, No Hire” Labor Market Continues: Initial claims fell to 199k and continuing claims eased to 1.866M. Layoffs remain low, but hiring/re-employment also remain sluggish.
🔹 Fed Minutes Highlighted Internal Debate: The FOMC minutes (Dec 9–10 meeting) underscored meaningful disagreement and a “close call” feel. The question remains whether more cuts are warranted, and if so, how many.
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