Just days after it appeared as though the fourth quarter's solid increase in economic activity, with GDP gaining a substantial 3.2%,  might well be the rule going forward in 2014, we have had a succession of data issuances that have cast some doubt on the expansion's near-term vigor.

On point, late last week we saw a dip in consumer sentiment from the University of Michigan, a sudden increase in weekly jobless claims, and a flattening out in personal income during December. Now, this morning, the Institute for Supply Management, a Tempe-Arizona-based trade group, came out with its monthly report on U.S. manufacturing activity. And the news here was not uplifting, to say the least.

Specifically, that group reported that its manufacturing index's rate of growth slowed to 51.3 last month. Expectations had been for a score of 56.0. By comparison, the December reading was a more vigorous 56.5. True, any reading in excess of 50.0 suggests that the industrial sector is still expanding, as, indeed, it is. Still, this was a sobering report, and the January figures were the worst since last May, when we saw a 50.0 survey result.

Breaking the report down, we see that new orders slowed dramatically from December to January, pulling back from growth of 64.4 to just 51.2. Also, moderating their growth was production, which slowed from 61.7 to 54.8, and employment, which moderated from 55.8 to 52.3.

On the other hand, inventories fell further, going from 47.0 to 44.0 and backlogs dipped from a growth rate of 51.5 to an actual contraction of 48.0. Strengthening last month were supplier deliveries and prices, with the latter climbing rather substantially for the 31-day period. 

As to the purchasing managers surveyed, we saw them note that they were seeing slight improvement in apparel, leather, and allied products, while in fabricated metal products, poor weather hurt incoming and outgoing shipments. Our sense is that the weather had some effect on growth in January, in general, with today's snowfall along the East Coast likely to start a series of difficulties in February. 

Looking at the report in total, we believe that the weather had some negative impact, although suggest effects are hard to quantify. Our sense is that this report is too early in the year and the weather's likely impact too uncertain for us to make more of this report just yet. So, while we are not ready to suggest that the economy in general will be entering a period of difficulty, this metric is at least a cautionary note going forward. 

At the time of this article's writing, the author did not have positions in any of the companies mentioned.