The US January PMI and the January nonfarm payroll will be the focus of economic data released this week. The regional economic indicators so far suggest a very positive read of the January PMI and January employment. The Chicago PMI for January (68.8) came in at the highest level in more than 20 years. Among its components, the employment index (64.1) was at its highest level since May 1984 and the new orders index (75.7) was at its highest level since December 1983.
Economic data from other regions were not as rosy as data from Chicago, but still painted a similar picture. The January New York Fed Empire State Manufacturing Survey result (11.92) improved modestly from the previous month (9.89). Results from the January Philadelphia Fed Business Outlook Survey (19.3) and the January Richmond Fed Manufacturing Survey (18) slightly declined from the previous month, but were still in expansionary territory. Both the new order index (12.39) and the employment index (17.6) in Philadelphia survey rose significantly from December 2010. The Richmond Survey new order index and employment index, meanwhile, were slightly down from December.
Dallas Fed Texas Manufacturing Outlook Survey (0.2) is the only regional survey that showed a significant decrease from December 2010 (15.3). However, even in the Dallas survey, the important new order index showed some increase (11.3 in December to 12.7 in January).
Compared to December 2010, the growth in January new order indices in regional surveys is roughly the same, while the growth in January employment indices improves mildly. Employment in the US manufacturing sector seems to be picking up. The S&P 500 index rose by 0.77% and the Nasdaq rose by 0.5%. The US January PMI is expected to continue staying close to the December level.
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