April ISM Manufacturing Index of 60.4 is Highest Since 2004; Real GDP Growth Could Be 6.2%
The ISM report came out today and showed continued, sustained, and strong improvements in the U.S. manufacturing sector, with the PMI Index posting the highest reading in almost six years (see chart). The index has increased in 13 out of the last 16 months, and reached 60.4 in April, the highest level since June 2004. It was also the ninth consecutive monthly index reading above 50, which means that economic activity in the manufacturing sector has been steadily expanding since last August. Further, index readings for the PMI above 42 indicate an expansion of the overall economy, and therefore "the PMI indicates growth for the 12th consecutive month in the overall economy," according to the ISM.
See Scott Grannis for more details on today's ISM report.
Update: According to the ISM, "an index reading of 60.4 is consistent with real GDP growth of 6.2% annually," thanks to Brian Wesbury and Bob Stein.
4 Comments:
Manufacturing Rose in April
MAY 3, 2010
"Norbert Ore, chair of the survey committee (Institute for Supply Management), noted that manufacturing is rebounding from extremely low levels thus making the expansion appear particularly strong...Mr. Ore said some firms are showing a willingness to add shifts, but are shying away from large-scale hiring."
My comment: Given the $8,000 homebuying tax credit expired Apr 30th, the expansion may slow in the second half of the year.
"The ISM manufacturing index is determined by a survey of purchasing managers and reflects the number of people who say economic conditions are better, compared with those who say conditions are worse. While the index can paint a picture of broad trends, some analysts warn that because it stems from a survey, the index can be subjective."
Economic outlook is cautious even with spending up
(AP) – 6 hours ago
"Factories are churning out more goods. Consumers are spending. Government aid is fueling construction activity. But stagnant pay and weak hiring will likely restrain the economic rebound in coming months.
Unless employers boost pay and ramp up hiring, economists say consumer spending will likely taper off and dampen the recovery.
Consumer spending rose 0.6 percent in March, matching economists' expectations. But personal incomes edged up just 0.3 percent, raising new worries about lackluster income growth.
At the same time, the personal savings rate fell to 2.7 percent of after-tax incomes. It's the lowest level since September 2008.
The annual savings rate had fallen as low as 1.7 percent in 2007.
The savings rate rose to 4.3 percent in 2009, the highest level in a decade."
How can Real GDP growth be what is being claimed AND state tax collection so low at the same time? You would think that if real activity were so strong there would be more tax revenue than is being reported.
Post a Comment
<< Home