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Monday, August 2, 2010

U.S. Manufacturing Grows 12m Straight; Jobs Up in Sector 8m in a Row

The ISM released its manufacturing report on business on Monday. Their index continued to show healthy growth in the sector. Perhaps even more encouraging is the employment growth measured in the report. It now registers an increase in jobs for 8 straight months and now at an accelerated pace.

Manufacturing continued to grow in July as their PMI registered 55.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

According to their report on business: "The past relationship between the PMI and the overall economy indicates that the average PMI for January through July (58 percent) corresponds to a 5.4 percent increase in real gross domestic product (GDP). In addition, if the PMI for July (55.5 percent) is annualized, it corresponds to a 4.5 percent increase in real GDP annually."


  1. Would you agree that the jobs picture is not very bright given today's report? It looks like unemployment will stay high well into 2011 at this rate. Don't you think lowering taxes, like Reagan did in 1982, would spur job growth? (0f course we would need to cut spending as well)

  2. Bill,

    Again, I believe the momentum continues in the "jobs growth" direction. Coming out of any recession it is never as quickly as everyone would hope, but in this case has been the quickest turnaround in history. The largest "tax" on individuals and small business today is healthcare cost -- which continues to grow at a rate larger than any tax or cost-of-living expense in my lifetime.


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