Not feeling well at all today, so this will be it until late evening or early tomorrow.
Don’t ask me how ISM’s manufacturing index increased, because I don’t know:
Economic activity in the manufacturing sector expanded in November for the sixth consecutive month, and the overall economy grew for the 54th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
… “The PMI™ registered 57.3 percent, an increase of 0.9 percentage point from October’s reading of 56.4 percent. The PMI™ has increased progressively each month since June, with November’s reading reflecting the highest PMI™ in 2013. The New Orders Index increased in November by 3 percentage points to 63.6 percent, and the Production Index increased by 2 percentage points to 62.8 percent. The Employment Index registered 56.5 percent, an increase of 3.3 percentage points compared to October’s reading of 53.2 percent. This reflects the highest reading since April 2012 when the Employment Index registered 56.8 percent. With 15 of 18 manufacturing industries reporting growth in November relative to October, the positive growth trend characterizing the second half of 2013 is continuing.”
Of the 18 manufacturing industries, 15 are reporting growth in November …
The underlying numbers are stronger than the 0.9-point increase would seem to indicate. As seen above, New Orders and Production went up much more than that, and Backlog of Orders also moved up 2.5 points to 54.0%.
I’m not at all convinced that the ISM result reflects the underlying reality in U.S. manufacturing, though the whole area deserves a closer look before I go out and declare that there is really a divergence.
The index’s history shows high values in 2010. Does anyone else remember that year as a great one for manufacturing? Neither do I.