Manufacturing has nearly stabilized according to the closely-watched ISM survey, and today’s better-than-expected report suggests that August will be the turning point.
The ISM Manufacturing Index jumped 4.1 points in July to 48.9, easily beating the Bloomberg forecast of 46.5. A reading of 50 reflects neither improvement nor decline.
More impressively, production increased 5.4 points to 57.9 and a strong 6.1 rise in new orders to 55.3 suggests industrial production is set to bottom.
But an improvement in manufacturing is not without costs, and prices paid rose from 50.0 to 55.0, the first time above 50 since September 2008.
It is becoming clear that the economy is at a bottom. And if we receive a couple of more outsized gains in the ISM survey, we will likely start to hear chatter about a V-shaped recovery.
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