ISM Hits 14-Year High

Buried in the news today was a very strong ISM report. The number came in at 61.3 which is the highest in 14 years. This tells us that the economy continues to hum along.

Institute for Supply Management’s factory index jumped 3.2 points to 61.3, topping the consensus for 57.6 and exceeding all estimates. ISM manufacturing readings above 50 indicate expansion. The new orders measure leapt 4.9 points to 65.1; the production index increased to 63.3 from 58.5. The export orders gauge fell to a 10-month low of 55.2 from 55.3 while the imports index dipped 0.8 point to 53.9, lowest since last September.

Key Takeaways

The report shows factories remained solid in the third quarter and adds to signals that the nearly decade-old expansion will hold up well in the second half of 2018. The rise in the employment gauge also suggests manufacturers may record another month of strong payroll gains in Labor Department figures due Friday.

The gauges of exports and imports also may indicate that months of intensifying tensions are taking a toll on trade. Negotiations with Canada to modernize the North American Free Trade Agreement ended without a deal by Friday’s deadline, though talks are scheduled to resume Wednesday.

President Donald Trump wants to move ahead with tariffs on $200 billion of Chinese imports as soon as a public-comment period concludes Sept. 6, Bloomberg News reported last week, citing six people familiar with the matter.

The next big report will come on Friday when the government releases the August jobs report.

Posted by on September 4th, 2018 at 10:24 am


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