The drop in the ISM manufacturing index to 41.5 in April, from 49.1, was more modest than we and the consensus expected and leaves it at a level consistent with GDP falling at a 5% annualised pace, similar to the decline seen in the first quarter. We fear the surveys are not capturing the true scale of the downturn, however, with the incoming hard data pointing to GDP contracting at a 40% annualised rate this quarter.
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