ISM index: Strong pace of expansion

Manufacturing activity advanced with the ISM index reaching 54.9 and its strongest pace of expansion since December. The advance of 1.2 index points was softened by a 2.5-point decline in the prices paid measure, which eased to 56.5 and again the least since December. Production, new orders and inventory levels were largely unchanged, yet the employment index fared a healthy 3.6-point jump to 54.7 as companies indicated the need to expand hiring.

The most notable feature of the report was the surge in trade data, with both export and import orders rising at a decent pace. Indeed the increase to 58.0 for the import reading matched the August 2013 peak, which was also the healthiest level since April 2010. Overall the headline data is encouraging and shows the willingness of companies to boost the labor input to meet firmer demand.

However, in order for the economy to grow, economists will demand higher readings across new orders and production components.


 

Export and import activity jumps ; imports match multi-year high.

About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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