July ISM Shows Continuing Improvement

The July ISM numbers continued to show the manufacturing economy still in a state of contraction but just barely.

The index rose to 48.9 in July from 46.2 in June. Any number below 50 indicates contraction. Within the numbers, new orders were up to 55.3 from 49.2, production came in at 57.9 versus 52.5 and surprisingly the employment index grew to 45.6 from 40.7.

From Jake at EconomPicData.com, here is a graphic of the sectors:

click to enlarge

Separately, Ford (F) released its July sales numbers early and they were up 2.3% over the comparable period last year. That’s the first increase the company has reported in over two years. I will post all of the manufacturers’ numbers later.

The ISM improvement is both expected and welcome. There seems little doubt that the economy is stumbling towards expansion. It’s going to take some time to determine whether were just seeing inventory restocking or a base is forming for continued growth. As always, consumer demand is going to be the key to any sustained recovery.

More here and here.

Comments

[update:]

How is a contraction an improvement? Last time I checked a contraction is a CONTRACTION as in the numbers are worse overall than a month ago.

Or is this some ridiculous 2nd derivative 'slope of hope'?

Aug 03 05:36 PM

[conceptwizard:]

700 Billion dollars in a stimulus explosion and still a Contraction. Just imagine where we would be without it.

Aug 03 08:48 PM

[roflmfao:]

"There seems little doubt that the economy is stumbling towards expansion. It’s going to take some time to determine whether were just seeing inventory restocking or a base is forming for continued growth. As always, consumer demand is going to be the key to any sustained recovery."

wasn't it just yesterday that everyone was thinking "stabilization" now its "stumbling towards expansion" WTF????? HYPE ALERT HYPE ALERT

"consumer demand is going to be key"

didn't we just determine consumer demand is still contracting based on the last GDP? It as well as jobs are still contracting DEEP into this recession. However I guess if you consider government spending and no organic growth to be bullish then god bless you.

Aug 03 10:00 PM

[Jobu37:]

Due to the success of the Cash for Clunkers program it seems likely that the auto industry alone will push the index over 50 in August. Ford had already ramped up production in July but now they are faced with extreme shortages on Focus and Escape models. Chrysler and GM both now have an economic reason to start producing since they have finally worked their 100 day+ levels of inventory down a bit.

Numerous steel producers started calling workers back from furlough last week due to the uptick in demand which will also contribute to more growth in August.

And we also have the remaining unspent $600 billion in stimulus yet to come. The solar panel and wind turbine companies will be ramping up as they start to get their piece of the stimulus pie. Not to mention the Caterpillars of the world as more projects get started with stimulus monies.

Aug 04 07:32 AM