Purchasing Managers' Index (PMI) and Institute for Supply Management (ISM) manufacturing survey were released Tuesday morning. The readings from both indexes signal a strong movement forward for manufacturing. Unfortunately, the markets had rallied handily in August ahead of the dual reports on Tuesday.
The PMI reading for the month of August was 57.9, just above the Bloomberg estimate 57.8. This reading is up from 55.8 in the month of July. The PMI flash reading from the middle of the month was 58.0. This survey still marks a strong increase in exports on the month, as well as production and employment. Input prices experienced a rise, but the prices for finished goods remained relatively the same.
The ISM reading was reported at 59.0, well above the Bloomberg estimate 56.8. This reading is also up from 57.1 in the month of July. With the index reading above 50, the manufacturing sector is expected to continue growing, and this increase marks an acceleration in the growth.
Propelling this growth in the ISM was new orders, which rose to 66.7 from 63.4 in July, and production, which was up to 64.5 from 61.2 in July. Employment remained relatively unchanged at 58.1. Export orders grew to 55.0. The lowest reading in recent memory for the ISM was February where the index recorded an annual low of 51.3 — with the help of the polar vortex- and since has made a steady increase.
Overall, both reports reflect a strong outlook for the future of the manufacturing sector. Unfortunately, that did not translate into additional market gains. Both the Dow and S&P 500 were indicated up on the day before these numbers were released. At 10:30 a.m. Eastern Time, the Dow was down 15 points and the S&P 500 was virtually flat.
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Filed under: Economy