ISM manufacturing index jumps to six-year high in August

Bill Pugliano  Getty Images

Bill Pugliano Getty Images

The new-orders index dipped just 0.1 point to 60.3%, the production index rose slightly to 61%, and the employment index vaulted 4.7 points to 59.9% - the best since June 2011. The backlog of orders rebounded by 2.5 points to 57.5, matching a March cycle high. He said the only downside to the report was the decline in new export orders - with global growth strong and the dollar soft, US exporters should be gaining market share.

Friday's report showed a sharp rise in hiring among manufacturers.

Customer inventories also fell sharply during the month which should bolster expectations that manufacturing output will continue to strengthen in the short term. "This is probably pent-up demand over many, many years", Mr. Fiore said.

The weather may be cooling off, but today's ISM Manufacturing report for August came in hot.

The closely-watched ISM purchasing managers survey showed all six of the "big six" industries - representing 70 per cent of manufacturing GDP - accelerating activity last month. Meanwhile most industries saw a growth in August, while comments from the survey respondents continued to be widely positive. The index remained above 50 percent, which reflects manufacturing growth, for the 12th consecutive month and translated to overall economic growth for the 99th month in a row. As the mentioned industries return to full capacity, manufacturing activity is expected to see a boost in the following quarter.

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