So says the latest ISM Index number.
Good news for people who like data-specific manufacturing news:
The ISM manufacturing index is high. Real high!
ISM Manufacturing (US) comes in at 61.3, its highest level since May 2004 and 2nd highest reading in the past 30 years. pic.twitter.com/TSfOiiW8Wb
— Charlie Bilello (@charliebilello) September 4, 2018
The Institute for Supply Management (ISM) for decades has been putting out a monthly survey of purchasing managers to gauge the relative health of manufacturing sector as they see it. Roughly speaking, a number below 50 means a pessimistic outlook, while a number above it means an optimistic one. The latest number (from August 2018) was 61.3 – the highest since May 2004. It suggests that American manufacturers are confident in the economy.
The Wall Street Journal, however, reports that it’s not all good news:
Despite the headline growth in factory activity, there are latent signs recent trade actions may be beginning to take a toll. An underlying gauge of new export orders for primary metals, transportation equipment and machinery declined in August, with machinery last declining at the beginning of 2017.
“We’re a significant exporter of railcars, airplanes, automobiles…Machinery is our number 6 industry sector,” said Tim Fiore, who oversees the ISM survey of factory purchasing and supply managers. “If export markets are closed off to us, orders will go down, [then] exports and production.”
Here are two things worth looking at to better gauge the health of American manufacturing industries:
Wages. Are they rising? It certainly doesn’t look like it right now, despite the Trump administration’s protests.
Factory jobs. Is the economy making more of them? We’ll get a progress check on Friday when the next jobs report comes out.