The ISM report on manufacturing says the economy is still expanding. It is at a level consistent with sustained GDP growth and rising stock market values.

The Institute of Supply Management (“ISM”) publishes a closely followed survey of manufacturing activity at the beginning of each month.  Its keynote survey diffusion index is the “PMI” or “purchasing manager index”.  The PMI for September came in at 51.6.  A PMI in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. The September PMI marked the 28th consecutive month of growth in the overall economy, as well as expansion in the manufacturing sector for the 26th consecutive month. The ISM’s reports contained the following statement . . . “The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (56.2 percent) corresponds to a 4.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for September (51.6 percent) is annualized, it corresponds to a 3.2 percent increase in real GDP annually.”  I have charted the index since 1967 and shaded recession periods. The public’s concerns about a recession appear premature by this measureJeb Terry, Sr. Oct. 7, 2011

Aberdeen Investment Management – a guide service for micro-cap technology investment

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