Following on the heels of stronger-than-expected Manufacturing PMIs across the world, the ISM Manufacturing jumped from 50.9 to 55.4 in July for its largest one month increase since June 1996. That's right. The ISM Manufacturing report has not had a one month increase like this in 17 years.
Looking at the internals of this morning's report shows that six components rose this month, while just three declined. Relative to last year, this month's report was even stronger as the only two components that declined were Business and Customer Inventories. Besides the big jump in the headline reading, the most notable aspect of the ISM Manufacturing report for July was the Production component, which increased from 53.4 to 65.0. That is the highest level since May 2004 and represents the seventh-largest monthly increase going all the way back to 1948.