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Tuesday, September 2, 2014

ISM Manufacturing Index Reached Highest Level Since 2011

The ISM manufacturing index was 59.0 in August, the highest level since early 2011. The index has been above its expansionary threshold of 50 for 15 months. The ISM report points to future growth.



The details of the report were strong. The New Orders Index surged to 66.7, a post-recession high. The inventory index rose 3.5 points and into expansionary territory. As a result of new orders and inventories improving, the gap between new orders and inventories - a proxy for future production – remained at elevated levels, recording 14.7 in August.

The Employment Index was the one spot of weakness. The index declined 0.1 points to 58.1. However, the index level is well above the expansionary threshold and the second highest reading this year.

The Export Orders Index grew 2.0 points to 55.0, however the Import Index grew more, increasing 4.0 points. The increased trade gap will likely negatively impact GDP growth.

Read the ISM release.

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