Manufacturing continues to shine in an otherwise cautious outlook, according to the latest data from the Institute for Supply Management.
The ISM Manufacturing Index increased 3.1 points to 59.6, the fastest pace since July 2004, and most indicators point to further gains.
Both new orders, which are more forward looking, and production rose above 60, while employment dipped slightly but remained above 50 for the fourth-straight month.
Manufacturers continue to report that inventories among customers remains too low, which also suggests that production will remain on the upswing in the near term.
In addition, exports jumped 5 points to 61.5, signaling that the overseas economy continues to improve.
About the only dark spot in an otherwise stellar report was the big jump in prices that manufacturers are paying to procure raw materials (up 8 to 75.0).
However, at this point in the business cycle, commodity inflation – sign of strong demand – is unlikely to seep into the broader price level given that there is plenty of slack in the economy and demand, though rising, is far from robust.
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