The ISM Manufacturing report for the month of February came in with another strong report, rising to 57.7 from last month’s reading of 56.0 and expectations for a reading of 56.2. This month’s reading was the highest since August 2014 and was the sixth better than expected report in a row. That’s the longest stretch of better than expected reports since the seven-month run from June through December of 2013. Before getting into the details of the report, we first wanted to highlight what the respondents were saying. We can’t remember a report where they sounded this bullish.
The chart below shows the headline reading in the ISM Manufacturing report going back to 2000. There hasn’t been such a sustained run higher in the monthly readings since the beginning of the economic expansion.
The table below shows the m/m and y/y change in each of the ISM’s various subcomponents. Relative to last month, we saw broad-based strength with just three categories (Customer Inventories, Employment, and Prices Paid) showing declines relative to January and every category rising on a y/y basis.
Finally, there are three charts we wanted to specifically highlight. Production rose for the sixth straight month, rising to its highest level since March 2011, while New Orders surged to their highest level since the early months of the economic expansion. Finally, with practically every other component rising, Prices Paid took a breather this month, posting a slight decline from last month, which was the highest level since 2011.
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