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Monday, March 1, 2010

Manufacturing Jobs Grow for Third Straight Month

The Institute for Supply Management released its February 2010 Manufacturing Report On Business Monday. The report shows that manufacturing jobs grew for the third month in a row. Even more upbeat was the fact that the report indicates that job growth in the sector is now accelerating.

Furthermore, overall economic activity in the manufacturing sector expanded in February for the seventh consecutive month and index correlations with the larger U.S. economy indicate growth now for the 10th consecutive month.

ISM's Employment Index registered 56.1% in February. That is 2.8% points higher than what was reported for January. This third consecutive month of growth in manufacturing employment represents the highest reading for the index since January 2005.

Source: Institute for Supply Manufacturing
Ten of the 18 manufacturing industries that are tracked by the ISM reported growth in employment in February. They are: Textile Mills; Petroleum & Coal Products; Apparel, Leather & Allied Products; Paper Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Food, Beverage & Tobacco Products.

An early indicator of what jobs growth will look like in the near future is registered in the ISM's Backlog of Orders Index. It registered 61 percent in February, accelerating 5% higher than in January. Of the respondents who report their backlog of orders to the ISM, a full third reported greater backlogs with only 1 in 10 reporting smaller backlogs. You may remember that as backlog orders grow, employers have in increased propensity to hire new workers.

Norbert J. Ore, chair of the ISM's Business Survey Committee said, "The past relationship between the PMI and the overall economy indicates that the average PMI for January and February (57.5 percent) corresponds to a 5.2 percent increase in real gross domestic product (GDP)."

The report is further evidence of a U.S. economy that is on track for healthy net jobs creation by summer.

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