If you’ve been watching blogs such as Spend Matters and Supply Excellence, you know that I am a critic of the Institute for Supply Management’s Purchasing Manager’s Index as an economic indicator.

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But, finally, some financial analysts are realizing how suspect (at best) ISM’s index really is. In today’s New York Times’ article entitled “Dow Plunges of Survey of Business,” Julian Jessop of Capital Economics said “One extreme number on its own is not a reliable recession signal…It is so out of line with other January indicators that it is hard to know whether or not to believe it.”

I don’t doubt that the economy is experiencing a slowdown. But the crazy drop in the ISM index (over 16% from December 2007 to January 2008) is simply outlandish.

I’m glad that the financial analysts are finally starting to see the flaws in ISM’s index. I think that in the near future either ISM will make some changes to its index to make it a better indicator or Wall Street and the media will stop paying attention to it.