After a two-month pullback from the highest levels of the cycle, the ISM Manufacturing report for December showed a nice rebound. While economists were forecasting the headline number to come in at 58.2, which would have been unchanged from November, the actual reading came in at 59.7, and that’s the third highest monthly reading of the recovery.
A look at this month’s commentary also shows more of the same, as sentiment is unequivocally positive.
Below we break out this month’s ISM Manufacturing report by its various subcomponents. Whether you look at a m/m or a y/y reading, breadth in the report was extremely positive. The only two components that were down relative to November were Customer Inventories and Employment, while only Customer Inventories declined on a y/y basis. Relative to last month, the real standout was New Orders, which rose from 64.0 up to 69.4. That’s the highest reading for this component since January 2004, and before that period, you have to go back to the early 1980s to find a period when this component was higher.