INDICATOR: November Supply Managers' Manufacturing Survey
KEY DATA: ISM: 58.7 (-0.3 point); New Orders: up 0.2 point; Employment: -0.6 point
IN A NUTSHELL: "Manufacturing continues at a robust pace and with orders soaring, it is likely that conditions will only get better."
WHAT IT MEANS: If manufacturing activity is an indicator of the strength of the economy, then we are in great shape. The Institute for Supply Management's November manufacturing index eased a touch, but it came off of a very high level in October. Indeed, there was a large jump in the October index so you can say that the sector consolidated its gains. The details of the report were really good, even if some of the components inched downward. Best of all was the gain in orders, which is at a level that has rarely been seen. Since February 2004, there was only one month, this past August, when it was higher. In addition, both export and import orders increased faster. It is great, but surprising to see that the U.S. continues to be so competitive in the world economy despite the rise in the dollar. Production remains strong, though it expanded at a slightly less robust pace. Hiring continued to be solid and that bodes well for the November jobs report that will be out on Friday. With orders rising, output growing, delivery speed slowing and backlogs building, there is every reason to believe that the manufacturing sector will accelerate.