Over the years, I’ve met several economists at the Institute of Supply Management and found them to be as  nerdy and humor-challenged as most academic economists.  Each month, they publish the closely watched ISM Index of Manufacturing.  Anything above 50 means the economy is expanding.  Anything below 50 means the economy is contracting.

Yesterday, the market was expecting 55.5 for May.  Promptly at 10 AM, the ISM released the report showing 53.2 and the stock promptly dropped about 20 points.  Then, just before 11:30 AM, they announced they had made a “software error” and the correct number was really 56, which caused the stock market to reverse its losses and turn positive.  An hour later, they corrected their earlier correction and said the correct number was really 55.4, which was essentially what the stock market was expecting in the first place.  The stock market promptly ignored the last ISM release and may even do so again next month.

While it was certainly a bad day for nerdy, humor-challenged academic economists at the ISM, it was a good day for the rest of us, as it demonstrated that the stock market really does pay attention to our nerdy numbers.

Takeaway:  the economy is still expanding just fine.