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Strong U.S. Manufacturing Numbers

(Image source: Variance Films)

Manufacturing in the U.S. expanded at the strongest pace since June of 2011. The Institute for Supply Management’s index climbed 55.7 for the month of August, which was more than the forecasted figure from economist of 54.3. Any reading above 50 indicates strong growth in the manufacturing sector. Within the same report, new orders were robust and inventory levels were weaker. 

New orders rose to 63.2, which was the highest level since April of 2011. This is great news for the U.S economy because according to Haver Analytics, “During the last ten years, there has been a 69% correlation between the ISM index and the q/q change in real GDP.”With construction spending in July at a four year high and manufacturing in August  at two year high, third quarter GDP figures should be better than expected.