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ECON: ISM Manufacturing Index Slightly Higher Than Expected
Posted to: Micro News
Wednesday, January 02, 2013 10:10 AM
- ISM Manufacturing PMI 50.7 vs 50.3 forecast, 49.5 previously
- Prices Paid: 55.5 vs 51.5 forecast, 52.5 previously
- Employment Index 52.7 vs 48.4 previously
- Employment Index highest since September
Manufacturing expanded in December as the PMI registered 50.7 percent, an increase of 1.2 percentage points when compared to November's reading of 49.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI™ in excess of 42.6 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December PMI™ indicates growth for the 43rd consecutive month in the overall economy, and indicates expansion in the manufacturing sector. Over the last six months of 2012, manufacturing registered expansion in three months and contraction in three months, moving back and forth across the 50 percent mark. Holcomb stated, "The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through December (51.7 percent) corresponds to a 3.1 percent increase in real gross domestic product (GDP). In addition, if the PMI™ for December (50.7 percent) is annualized, it corresponds to a 2.7 percent increase in real GDP annually."
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