According to Warren Buffett, the recession is over. Until only recently, it was beginning to look like the rest of America was coming around to Warren's worldview.

Just one month ago, the Institute for Supply Management's "Purchasing Managers Index" showed American industry at its most bullish levels in months. The automotive industry was roaring (and according to recent sales reports out of Ford (NYSE: F) and General Motors (NYSE: GM), still is). The Dow leapt 250 points in a day last week. Status lights green -- all systems go …

Until last week. First, there was the unemployment report. Then, we had the double whammy of a pair of PMI updates from ISM. Here's how the more popular (manufacturing) chart read:

According to ISM, American manufacturing posted its "second fastest [growth figure] in the last six months" in November. Which is true … but it also slowed down. And the more I look at the numbers, the more I see the economy in slow-motion car-crash mode.

Deliveries of component parts from suppliers to manufacturers increased 6% in November, compared to October. But what did the manufacturers do with these raw materials?

  • They stockpiled them, as inventories climbed 2.8 percentage points.
  • They cut production rates 7.7%.
  • They justified the slowdown by noting that new orders from their customers were down 2.3%.

Don't get me wrong -- there are pockets of good news in the economy. Within the transportation equipment industry in particular, manufacturers such as Boeing (NYSE: BA), Ford, and GM confided to ISM that while domestic demand remained anemic, "international markets [are] expanding rapidly." The computers and electronics industries tell us that "capital projects are being released, which is improving our sales" -- good news for companies such as IBM (NYSE: IBM) and Intel (Nasdaq: INTC). Friday's "non-manufacturing" PMI survey showed strength in new orders for export as well, with the IT industry predicting that the "outlook for fourth quarter is good."

But overall, order backlog for American industrial products flatlined at 0% growth, and exports of finished goods abroad slipped 3.5%. Prices are falling in both the manufacturing and non-manufacturing sectors in an effort to create demand.

Foolish takeaway
If you wonder why Ben Bernanke is so keen on pumping another $600 billion into the economy, and what kind of bad news it takes to get Republicans and Democrats to agree on tax cuts to spur growth -- look no further.

At least, that's my read on the PMI reports. Maybe you see something different? Take the Foolish Rorschach test, and tell us about it below.

Intel is a Motley Fool Inside Value selection. Ford is a Motley Fool Stock Advisor pick. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of International Business Machines.

Fool contributor Rich Smith does not own shares of any company named above. Rich is not a licensed economist, but he plays one on the Web. Check out his latest stock recommendations on Motley Fool CAPS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.