March ISM Manufacturing Index Highest Since 2004
"Economic activity in the manufacturing sector expanded in March for the eighth consecutive month, and the overall economy grew for the 11th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business (see chart above).The manufacturing sector grew for the eighth consecutive month during March. The rate of growth as indicated by the PMI is the fastest since July 2004. Both new orders and production rose above 60 percent this month, closing the first quarter with significant momentum going forward. Although the Employment Index decreased 1 percentage point to 55.1 percent from February's reading of 56.1 percent, signs for employment in the sector continue to improve as the index registered a 10 percent month-over-month improvement, indicating that manufacturers are continuing to fill vacancies. The Inventories Index provided a surprise as it indicated growth for the first time following 46 months of liquidation — perhaps signaling manufacturers' willingness to increase inventories based on expected levels of activity."
MP: Add this to the growing list of V-shaped signs of economic recovery, especially in the manufacturing sector. Notice that the recovery of manufacturing activity since mid-2009 is much stronger than the recovery in the period following the 2001 recession, and we're quickly approaching the peak manufacturing activity reached in 2004.
11 Comments:
"Add this to the growing list of V-shaped signs of economic recovery"
Hmmm..the last two recessions, the so-called jobless recoveries, were certainly not a v-shaped recovery in employment, and there's no reason to expect this recession to be any different.
--Pingry
Die recession, die, die, die!
Produce Baby, Produce.
Export Production, Export.
Production>Consumption=Income>Debt
Exports>Imports=Job Creation>Job Loss
The U.S. has driven much of the economic rise of the rest of the world with consumption. It is now time for the U.S. to enforce trade agreements with the beneficiiaries of export driven economies. There is no doubt that the high producitivity of U.S. workers will win true competition. It is time to drive Exports and return to the the world's status of creditor and not debtor.
Gettingrational, I'll give you IOUs for all your goods. Get to work.
Consumption 100 - Production 0 = Consumption 100
Peak Trader, I want precious metals for all my IOUs or LIBOR + 4%. This way my soverign wealth fund receives the return on investment it deserves and I demand. The only alternate financing is equity control of your major industries.
Gettingrational, sure, I have an unlimited supply of IOUs.
Peak Trader, RE: Your unlimited supply of IOUs. Now that I have control of your economy I will laugh at you like the students at Baidu laughed at U.S. Secretary Geithner.HaHaHa, you have no more credit.
Gettingrational, the students in the article you cite understand the real worth of IOUs better than you.
Today, Tim Geithner stated:
"It is going to take a long time to bring it down (the jobless rate) because of the damage of the recession."
Of course, he can't say anything about the damage in the jobless rate caused by his own administration.
The ISM Manufacturing Index measures the rate of change in manufacturing output. Above 50 indicates expansion. Actual aggregate output is still low:
Holding back job growth? Workers' awesome output
March 31, 2010
"One of the great surprises of the economic downturn that began 27 months ago is this: Businesses are producing only 3 percent fewer goods and services than they were at the end of 2007, yet Americans are working nearly 10 percent fewer hours because of a mix of layoffs and cutbacks in the workweek."
My comment: Excluding the external sector, U.S. output is even lower (since the U.S. current account deficit is 3% instead of 6% of GDP). To achieve a U-shaped recovery, real GDP growth needs to expand at a much faster rate (in 1982-83, real GDP growth averaged 8.5% for five consecutive quarters).
Peak Trader, You misunderstand about the printing of IOUs. U.S. trade deficits (specifically with China) are resulting in commodity and other asset ourchases. It is a myth that the U.S. is purchasing goods with worthless IOUs.
Huge amounts of U.S. currency are being used by China to buy large positions in commodity ETFs and other assets via the CIC and other soverign wealth funds.
Beida students were laughing at the Mr. Geithner because they know that foreign exchange holdings give China vast economic resources.
Gettingrational, here's how the media summarized why Chinese students laughed at Tim Geithner:
"A major goal of Geithner’s maiden visit to China as Treasury chief is to allay concerns that Washington’s bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.
“Chinese assets are very safe,” Geithner said. His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home."
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