ISM indexes show continued growth
Purchasing Managers Index climbs for 17th straight month to near 60 points, which corresponds to roughly 5% GDP growth.The bellwether Purchasing Manager’s Index from the Institute of Supply Management continued its rapid rise in October, according to data released this week by the ISM.
The PMI rose to 59 from 56.6 in September. An index reading of higher than 50 indicates that manufacturing is expanding. The index has grown for 17 consecutive months.
The ISM said a reading of more than 43.2, over a period of time, generally indicates economic expansion, with October representing the 65th consecutive month of economic expansion.
“The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (55.6 percent) corresponds to a 4.1-percent increase in real gross domestic product on an annualized basis,” said ISM Chairman Bradley Holcomb. “In addition, if the PMI for October (59 percent) is annualized, it corresponds to a 5.2-percent increase in real GDP annually."
Another ISM metric, the New Orders Index registered 65.8, an increase of 5.8 points from September, indicating growth in new orders for the 17th consecutive month as well.