The August manufacturing data from the Institute for Supply Management is actually positive and above that 50.0 threshold for growth versus contraction. It is easy to point to some exceptions here, but this is back to the same relative reading of June 2007. The ISM data said that the nominal PMI report was 52.9%. It also noted that both new orders and production are growing, but noted that employment and inventories are still in contraction with supplier deliveries.
For August, we had a Dow Jones estimate at 50.9%. This matched the summer-2007 levels and is the first time we have see a ‘growth’ figure above 50.0 since January-2008.
The prices paid, a measure some look at for inflation estimates, rose to 65.0 from 55.0 in July. New orders was right behind it at 64.9 versus 55.3 in July. Production was 61.9 bs 57.9 in July.
Lagging was employment, at 46.4 in August versus 45.6 in July (still less-bad)…. Also lagging was a reading of 34.5 for inventories versus the reading of 33.5 in July.
It is easy to throw many disclaimers on this data and point out the reference months and more. But growth is growth, and is still better than more contraction….
JON C. OGG
SEPTEMBER 1, 2009
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