Readings this week from the Institute for Supply Management suggest a strong outlook for the economy.
The ISM manufacturing index was at 57.1 percent in July, a 1.8 percent increase from June and the 14th consecutive month of expansion. This report was well above economists’ expectations of 55.9 percent and the highest reading since April 2011. Out of 18 manufacturing industries, 17 grew this month.
Employment growth saw a significant jump, to 58.2 percent in July from 52.8 in the previous month. It was the strongest monthly employment rate for the manufacturing ISM since June 2011. The Production Index was also up to 61.2 percent, a 1.2 percent increase from June.
On the non-manufacturing side, numbers were even more positive. The ISM non-manufacturing index rose to 58.7 percent from 56.0 in June, the highest reading since December 2005.
The Non-Manufacturing Business Activity Index was at a 3.5 year high with 62.4 percent, up from 57.5 in the previous month. According to the NMI, sixteen non-manufacturing industries reported growth in July. Employment rose 1.6 points to 56.0 percent in July, the highest reading in the past six months.
ISM readings above 50 percent imply more companies are expanding versus shrinking.
Motor Vehicle Sales
Vehicle sales slowed slightly to 16.5 million in July, down 2.4 percent from 16.9 million in June but an increase of one million from 15.5 million in July 2013. Auto sales have been consistently stronger than the overall economy sine the recession.