Manufacturing continues to be the shining star in this recovery. Several reports out this week underscore the fact that US factories continue to post solid results in a growing US economy.
The ISM report on business reported on Tuesday that their "PMI indicates growth for the 29th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 27th consecutive month. The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (55.7 percent) corresponds to a 4.6 percent increase in real gross domestic product. In addition, if the PMI for October (50.8 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually."
On Monday two region reports underscored the ISM report.
Very strong rates of monthly expansion in the Chicago area extended through October. The Chicago purchasing managers composite index came in at 58.4, well above 50 to indicate monthly expansion in general business activity though at a slightly less robust pace than September's 60.4 level. But October's 58.4 reading, which is four tenths above the Econoday consensus, is impressive and is right at the four-month average of 58.5.
In Texas -- factory activity increased in October said the Dallas Fed Manufacturing survey. The production index remained positive, suggesting growth is continuing. Other measures of the Dallas survye of current manufacturing conditions also indicated growth in October, and the pace of new orders accelerated, compared to September.
The reports summarize surveys which include businesses from all areas of the economy -- surveys that continue to show exceptionally healthy manufacturing conditions in their regions.
When all you read is gloom, turn here for a much different perspective.