As noted here many times, the manufacturing sector continues to lead this recovery. And there was more good news at the factories in January.
On Tuesday the Institute for Supply Management released its latest manufacturing report on business and its headline composite index jumped to a rare 60.8 reading. The index is now at its highest level since May 2004 when the reading was 61.4 percent.
Every reading included in the index registered accelerating growth.
New orders spiked up nearly six points to an astonishing level of 67.8! And employment in the sector continues to accelerate -- now posting its 16th straight month of growth.Manufacturing is clearly the economy's leading driver in this recovery. But the overall economy will likely continue to benefit. In fact, the ISM correlated its Tuesday report (like it does each month) with an annualized GDP estimate:
The past relationship between the PMI and the overall economy indicates that the PMI for January (60.8 percent) corresponds to a 6.4 percent increase in real gross domestic product (GDP) on an annual basis.