ISM factory index jumps to 60.8% in January (highest since May 2004)

Activity at the nation’s manufacturers in January accelerated to the fastest pace seen since May 2004, according to a closely followed survey of top executives released Tuesday.

The Institute for Supply Management index rose to 60.8% in January from 58.5% in December. It marked the 18th straight month of expansion in factory activity, as the manufacturing sector continues to outperform other sectors of the U.S. economy. The report was stronger than expected. The ISM index had been expected to remain steady at 58.5%, according to economists surveyed by MarketWatch.

Readings above 50% in the ISM diffusion index indicate that more firms are growing than contracting. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better or worse in the most recent month than in the prior one. The nation’s economy, as measured by gross domestic product, accelerated to a 3.2% growth pace in the fourth quarter.

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http://www.marketwatch.com/story/ism-factory-index-jumps-to-608-in-january-2011-02-01

Yup no recovery here. I expect the doom & gloomer to stealthy bury this good with unrecs.

:D

As a small business owner I see no improvement on Main Street.

Fourteen of 18 industries as tracked by Tempe, Ariz.-based ISM were growing in January, led by petroleum, primary metals and apparel

The numbers are waaaaay out of whack because of the Petroleum (National Gas, Coal, Oil, etc) and 'Primary Metals'. One word. Gold.

From the actual report. Comments made by people interviewed in the survey:

"Continued weakness in the dollar is having a negative effect on the components we purchase overseas and increasing our material costs." (Transportation Equipment)
"Lead times are increasing significantly, and commodity pricing is starting to increase." (Chemical Products)
"January/February sales will be decent, and we see a strong March. We're cautiously optimistic but reluctant to hire." (Fabricated Metal Products)
"Business is still slow with no pick-up in sight." (Furniture & Related Products)
"We continue to see unexpected strength in many non-U.S. markets." (Fabricated Metal Products)

Bottom line. No new jobs will be created. Also; what this "report" doesn't take into account is the number of manufacturing companies that have closed down. US Manufacturers are still faced with the dilemma of charging more and losing sales or cutting their bottom line. "Sorry Mr. Jones, we appreciate your 30 years of service with our Company, but we have to let you go."

One healthy tree in a dying forest doesn't make the forest healthy.

A 'belief' can distort your thinking.

Weak dollars help exports and hurt imports - good for US jobs

Material prices rise when demand exceeds supply - which drives increases in production

Longer lead times indicate insufficient capacity

Cautious optimism but hiring reluctance us a necessary step before open optimism and hiring can be reached

Furniture quote DOES mean bad news, but a highly specific industry with mostly overseas production

Unexpected strength in non-US markets means a greater demand for US exports.

Barring the furniture guy every quote is a leading indicator or current indicator of increased demand and insufficient capacity - the greatest factors in hiring.

I know what the quotes mean.

Weak dollar can help exports unless US manufacturers are setting up outside the US. Which they are.

Material price increases won't drive up production. And there is no supply/demand element at play here. People aren't buying shit. No demand. No reason for added supply.

Longer lead times mean poor cash flow, lower inventories, and difficulity in even obtaining the materials needed to manufacture.

No need to go on. Even the report you are so fond of says unemployment will increase.

Also, this report doesn't take into account the fact that many companies cut inventories at the end of the year for tax purposes.

In the real world I know what manufacturers are doing. Those that are still in operation. These are companies that rely on the end user (the consumer) to buy their shit. The end user isn't buying shit.

We could play word games all day. You cherry picked one part of my response. You never addressed the key points regarding the main reason for the index to rise.

People aren't buying shit? This survey is SOLELY based on purchases made by people who do it professionally!

Longer lead times are driven almost entirely by capacity, as is "difficulty obtaining material"

Since this is what I do for a living, in a manufacturing company, I can assure you your view of the "real world" is anecdotal at best and BS at worst.

The key point? There is only one point - manufacturers are buying more from other manufacturers. There is no way to spin this as doom.

What I'm saying is bullshit? If manufacturer A can't obtain material from manufacturer B to make their shit I'm just curious what would cause this. I'll take the real world knowledge contained in my nose hairs to your "experience" any day. I personally know quite a few manufacturers. Have for many many years. I constantly hear the purchasing problems they are having. Constantly. And I've seen a ton of material/parts production and final widget production moved out of the US.

And I find it interesting that you or the original 'Happy Days' person hasn't addressed my key points about how the numbers are weighted to two specific industries.

I was never trying to spin this as doom unlike the original intent on spinning this that our economy was recovering. No spin is required to make the point that the economy in this country is collapsing. Why don't you go back to watching Fox News and I'll get back to what I was doing.

:hi: