Purchasing Managers Ease Up

According to two surveys taken by the Institute for Supply Management,the U.S. economy is slowing.The ISM,a purchasing managers trade group,released its manufacturing and non-manufacturing indexes last week.The manufacturing index,a survey of factories and utilities,dropped from 56 in June to 53.8 in July.In a recession,the index could drop below 50.The non-manufacturing index showed a decline from 60.7 in June to 55.8 in July.Since the service sector represents 80% of the U.S. economy,this number is even more significant.The drop in these indexes parallels the slowing in job creation reflected in last Friday's employment report.The U.S. economy had been widely expected to cool off in the second half of 2007.This points investors to multinational firms that are not so reliant on U.S. profits,such as United Technologies(UTX) and 3M(MMM). Investors should be cautious today.The Federal Reserve issues its interest rate decision and remarks at 2:15 PM EST.If the market doesn't like them,it could take a tumble.