U.S. manufacturing at a 3-1/2 year high [View All]

Manufacturing at a 3-1/2 year high
Purchasing managers' index of manufacturing activity shows growth for the third straight month, indicating a 'sustainable recovery.'


NEW YORK (CNNMoney.com) -- A key index of U.S. manufacturing activity jumped in October, reaching its highest level in three and a-half years, a purchasing managers' group said Monday.

The Tempe, Ariz.-based Institute for Supply Management's (ISM) manufacturing index rose to a reading of 55.7 in October from 52.6 the month before. It was the highest reading since April 2006 when the index registered 56.

Economists were expecting a reading of 53, according to consensus estimates gathered by Briefing.com.

"This is another clear sign the recession is over, and the recovery has begun," said Adam York, an economist at Wells Fargo.

The monthly report is a national survey of ISM members, who are purchasing managers in the manufacturing field. Index readings above 50 indicate growth, while levels below 50 signal contraction. Readings below 41.2 are associated with a recession in the broader economy.

The index first showed growth in August after 18 months of contraction. It dipped slightly in September from the previous month, but has held above the level indicating growth for three months in a row.

"The jump in the index was driven by production and employment," said Norbert Ore, chair of the ISM's manufacturing business survey committee. "Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode."

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http://money.cnn.com/2009/11/02/news/economy/ISM_manufacturing_October/