Tuesday, September 01, 2009

It's Over (The Recession)

(Tempe, Arizona) -- Economic activity in the manufacturing sector expanded in August, following 18 consecutive months of contraction, and the overall economy grew for the fourth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

"The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July. While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth. The August index of 52.9 percent is the highest since June 2007. The 4 percentage point increase was driven by significant strength in the New Orders Index, which is up 9.6 points to 64.9 percent, the highest since December 2004. The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand."

MP: The 17.1 point increase in the ISM Manufacturing Index from February t0 August is the strongest six-month gain in more than 25 years, since July 1983. The August gain in the ISM Index to a level above 50 provides another piece of evidence that the recession has ended.

Originally posted at Carpe Diem.

12 Comments:

At 9/01/2009 1:53 PM, Blogger 1 said...

Hmmm, I sure do hope Norbert J Ore is right, I really do...

Some folks aren't so optimistic...

Peter Coy back in July penned the following in Business Week: Five reasons it's too soon to declare the recession over

The August 21 issue of the Orlando Business Journal noted the following: Small-business owners aren’t convinced the recession is ending and their outlooks darkened in July, according to a monthly survey conducted by the National Federation of Independent Business.

NFIB’s index of small-business indicators fell 1.3 points last month to 86.5, the second consecutive monthly decline. The biggest reason was a drop in the number of small-business owners who expect the economy to improve in the next six months
...

Who's right and who's wrong on this?

 
At 9/01/2009 2:08 PM, Anonymous GregL said...

Hanging your reputation on a single data point?

Well I suppose next month you can claim it's a double dipper.

 
At 9/01/2009 2:39 PM, Blogger OA said...

Little bit of color to the figures implies a bit of inventory replenishing with some growth:
"WHAT RESPONDENTS ARE SAYING ...

* "Production is picking up as demand [for] orders is being accelerated." (Nonmetallic Mineral Products)
* "Demand from automotive manufacturers increasing thanks to 'Cash for Clunkers.'" (Fabricated Metal Products)
* "In addition to improved business come the complications of a supply chain drained of inventory." (Paper Products)
* "The sudden increase in customer demand, plus the low inventories held at services centers, is causing a shortage in the supply of raw steel." (Transportation Equipment)
* "[It] appears customers' inventories are getting low, and they are cautiously placing orders." (Apparel, Leather & Allied Products)"

 
At 9/01/2009 2:41 PM, Anonymous ChrisB said...

What does this graph look like without the boost from Cash for Clunkers, I wonder?

 
At 9/01/2009 3:03 PM, Blogger bobble said...

two comments:

1. since manufacturing is only 10% of US gdp, is this really such a big deal?

2. looks like the its a case of "buy the rumor sell the news", as the stock market is down 185 points on this good ISM news.

 
At 9/01/2009 4:53 PM, Anonymous Anonymous said...

The stock market was so relieved to hear this news it decided to plunge 2% today.

Everything you're looking at today is trumped up, temporary government effects and seasonal activity. Standard seasonal adjustment models are understating the drop for failure to account for a level break. By the end of this year, all these measures will be in the crapper.

 
At 9/01/2009 5:51 PM, Anonymous Anonymous said...

Ya the recession is over. Next stop? Stagflation :`(

 
At 9/01/2009 8:20 PM, Anonymous Anonymous said...

El Centro, CA just surpassed a 30% unemployment rate - that's U-3, not U-6.

Go stand on a street corner there with this chart on your chest and tell them we're in a recovery.

We can call it Carpe Die Hard with a Vengeance.

 
At 9/01/2009 9:05 PM, Anonymous gettingrational said...

Let us hope that a large percentage of these goods are on board ships and planes as high value exports. The U.S. consumer has bills to pay for a long time; so will it be a V (exports) or a W (consumer led after a couple of years) shaped recovery graph?

 
At 9/01/2009 9:58 PM, Blogger OBloodyHell said...

> Hanging your reputation on a single data point?

Considering
a) In the paragraph itself he lists another data point...
b) He's been presenting other data points for well over a month...

I'd have to say your comment comes off as, well, kind of moronic.

I'm not saying I concur, mind you, with Dr. Perry's conclusion -- just that yours is much, much stupider.

 
At 9/02/2009 8:17 AM, Anonymous Anonymous said...

Errr Ummmm dont you mean the second GREAT DEPRESSION is over, and so soon!
When are we going to get wise to the "promote panic" playbook that both the government and media seem to love so much.
Media loves the drama.
Legislators love to be heroes to their constituents and supply "Solutions" no matter how preposterous.

Let's skip quibbling over whether the recession is over or not quite over, things have not developed into a "Great Depression" but the citizens now own a car company, have committed to a mountain of debt to avert a "crisis" that I for one, doubt was only there in the minds of those with an ulterior motive.

Look at this playbook, should we let them run the same play every time and win?

Thanks to blogs like this one more and more are being educated.

Bravo Mark!

 
At 9/06/2009 8:53 PM, Blogger Starcire said...

I look for the economy to get back to normal by 2015. Check out http://machinistmate.blogspot.com or http://theseaport.blogspot.com for an interesting article that is posted on these blogs.

 

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