Manufacturing expanding at a healthy clip

The Institute for Supply Management's Purchasing Manager's Index is a widely-watched barometer of activity in the manufacturing sector. A value greater than 50 means manufacturing is expanding, less than 50 means contraction. In January the index rose to 58.4, the highest level since 2004. The performance of manufacturing since its trough in December 2008 (when it hit 32.5) has been impressive in comparison to past recoveries: another economic indicator that paints a picture much more like the 1982-83 or 1975-76 recoveries than the 1991-92 and 2001-02 recoveries. The on-the-ground reporting of production and profits is getting more and more optimistic, while professional sourpusses are still fixated on the pessimistic forecasts of professional forecasters, the Obama Administration, CBO, and Fed.

(I'm going to feel pretty stupid if the sourpusses turn out to be right.)


(Correction: the graph shows the absolute change in the index relative to its low point, not the percent change.)