Last Update: 01-Aug-14 10:22 ET
- The ISM Manufacturing Index increased to 57.1 in July from 55.3 in June. That was the strongest reading since April 2011. The Briefing.com consensus expected the index to increase to 55.9.
- All of the regional Federal Reserve manufacturing surveys showed solid manufacturing growth in July. The national ISM Index confirmed those reports.
- Production levels improved as the related index increased to 61.2 in July from 60.0 in June. New orders strengthened to 63.4 from 58.9. Backorders remained in a contraction for a second consecutive month, but the pullback eased as the index increased to 49.5 from 48.0.
- The Employment Index increased to 58.2 in July from 52.8 in June.
- This is a highly overrated index. It is merely a survey of purchasing managers. It is a diffusion index, which means that it reflects the number of people saying conditions are better compared to the number saying conditions are worse. It does not weight for size of the firm, or for the degree of better/worse. It can therefore underestimate conditions if there is a great deal of strength in a few firms. The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle. It must be recognized that the index is not hard data of any kind, but simply a survey that provides broad indications of trends.
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