Last Update: 02-Dec-13 10:28 ET
- The ISM Manufacturing Index increased to 57.3 in November from 56.4 in October. That is the highest reading since reaching 59.4 in April 2011. The Briefing.com consensus expected the index to fall to 55.5.
- For the past several months, regional manufacturing surveys have hinted at a slowdown in manufacturing activities, but the national ISM has shrugged those off and continued its trek higher.
- Production levels accelerated as the related index increased to 62.8 in November from 60.8 in October. The move came as new orders rose 3.0 points to 63.6. Backlogs remain at elevated levels as the related index increased to 54.0 from 51.5 in October. The strength in back orders should keep production growth steady even if new orders deteriorate from their current level.
- The employment index increased to 56.5 in November from 53.2 in October.
- This is a highly overrated index. It is merely a survey of purchasing managers. It is a diffusion index, which means that it reflects the number of people saying conditions are better compared to the number saying conditions are worse. It does not weight for size of the firm, or for the degree of better/worse. It can therefore underestimate conditions if there is a great deal of strength in a few firms. The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle. It must be recognized that the index is not hard data of any kind, but simply a survey that provides broad indications of trends.
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