November US Manufacturing Data a Big Disappointment

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Man, the ISM number for November--traditionally the first read we get on the economy at the start of each month--was not good. The headline number, at 49.5, was the lowest since July 2009 and well below expectations. Below 50 is contraction; it has now contracted for the fourth time in six months.

This is not a strong economy. Of the 18 industries, 11 reported a contraction in November.

Not exactly upbeat commentary, either. The Chair of the Survey Committee, Bradley J. Holcomb, said: "Comments from the panel this month generally indicate that the second half of the year continues to show a slow down in demand; respondents also express concern over how and when the fiscal cliff issue will be resolved."

And you cannot blame it all on Hurricane Sandy. While some respondents noted that the storm delayed some shipments, most of the respondents noted a slowdown from earlier in the year in general:

Plastics and Rubber Products: "Differences between first half of year and remaining half are very dramatic, growing to a peak in the middle of the year with a gradual decline since."

Electrical Equipment, Appliances & Components: "Seeing a slowdown in demand across markets."

And what about the fiscal cliff? It was mentioned several times, but how about this comment from a respondent in the Metal Products business: "We will not look toward any type of expansion until this is addressed; if the program that is put in place is more taxes and big spending cuts - which will push us toward recession - forget it."

More spending and big spending cuts? That is almost certainly coming.

This mirrors the pessimism on the fiscal cliff, which I noted last week: the headline immediately after the fiscal cliff is resolved will read: "Era of American austerity begins."

—By CNBC's Bob Pisani

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