The Institute for Supply Management’s (ISM’s) October report on Manufacturing got a bit of ink and bandwidth when it was released on November 1. It came in at 51.2, which trailed expectations, but still represents “expansion mode,” if not by much (any reading above 50 indicates expansion. It marks the 41st consecutive month of manufacturng expansion, continuing a streak that is the best in over a quarter of a century. The reporting on this result was generally emphasized an “economic slowdown,” and “the lowest reading in three years,” even though expansion still continues.
The Non-Manufacturing report that ISM issued a couple of days later was stellar, coming in at 57.1, up from 52.9 the previous month, marking the 43rd consecutive month of expansion. Every single element making up the index was in expansion mode.
These two reports combined indicate that the economy is in pretty good shape, and that fourth-quarter GDP growth is heading for a significant improvement over the third quarter’s 1.6%, which I expect will be revised to about 2.0% by the time the final revision is published in late December.