The reports on business by the Institute of Supply Management (ISM) showed overall positive news, even with a marginally lower headline NMI for the non-manufacturing sectors by 0.3% to 53%. Manufacturing came above the consensus of 50.5% & 50.6% with an actual number of 51.6%, and non-manufacturing beat the consensus of 52.7% & 52.9% with an actual number of 53%. Both were within the consensus ranges provided from Econoday with a range of 49% to 52% for manufacturing and 51.3% to 54.2% for non-manufacturing.
Comparing the US manufacturing index to World-Wide Factory Activity indexes shows that the US was among the minority that experienced growing expansion of the manufacturing index. Over two-thirds of the sample countries experienced a drop in the month-over-month index. The positive news of US manufacturing increasing the index by 1% even inspired economist Dan Greenhaus of BTIG LLC to conclude that the "United States was not in a recession in the third quarter." Considering that the manufacturing sectors of the economy is minority share of the US economy, I would not be so confident of such declarations.
Trends are Over
Technically, there may be little possibility of a double dip recession coming now, but with unemployment stubbornly staying above 9%, hardly anyone can consider the US economy as healthy. Anyone from Tea Party members to Occupy Wall Street (OWS) crowds can agree on that.
A major concern of this blog, the Macro View of the Markets, is how the price indexes in the ISM reports and commodities are affected by rising prices. The price index for manufacturing increased slightly to 56% by 0.5% and dropped 2.3% to 61.9% for non-manufacturing. From a macro perspective on the economy, price indexes in the mid fifties to low sixties might be good for now considering the overhanging threat of deflation. This blog also has been tracking and graphing the number of commodities up in price and commodities that have multiple months of rising prices.