Thursday, March 03, 2011

ISM Business Activity Index Surges To 7-Year High

The ISM Non-Manufacturing Business Activity Index increased to 66.9 in February, the highest level in seven years (see chart above).  Some of the categories in the index that are listed as "growing" for direction and "faster" for rate of change are: production, employment, backlog orders, and new export orders.  Prices are "increasing" at a "faster" rate.

There were 13 industries reporting business activity growth in February: Real Estate, Rental & Leasing; Accommodation & Food Services; Utilities; Educational Services; Professional, Scientific & Technical Services; Public Administration; Mining; Finance & Insurance; Wholesale Trade; Transportation & Warehousing; Management of Companies & Support Services; Other Services; and Information. The four industries reporting business activity declining in February are: Construction; Health Care & Social Assistance; Arts, Entertainment & Recreation; and Retail Trade.


At 3/03/2011 11:06 AM, Blogger PeakTrader said...

That's an interesting report. Yet, even with a smaller current account deficit as a percentage of GDP (from 6% to 4%), which adds to GDP (since less negative net exports is positive), GDP is very low.

The Legacy of the Great Recession
March 1, 2011

In the fourth quarter of 2010, the demand for goods and services (actual GDP) was about $822 billion (5 percent) less than what the economy was capable of supplying (potential GDP).

At 3/03/2011 11:12 AM, Blogger PeakTrader said...

When expansions are well underway, after recessions, actual and potential GDP are roughly equal and sometimes actual GDP exceeds potential GDP.

At 3/03/2011 12:20 PM, Blogger PeakTrader said...

The Output Gap
January 19, 2011
Paul Krugman

"...there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce (over four years; 2008-2009-2010-2011).

At 3/03/2011 12:58 PM, Blogger morganovich said...

prices: 73.3, up 1.2.

19 month uptrend, highest value of any of the sub indexes.

also a couple respondent comments about commodity prices and capacity constraints.


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