GDP growth and ISM figures

The Institute for Supply Management reports that its purchasing managers index for manufacturing was 59.7% in May. Its non-manufacturing business activity index was 61.1%. Numbers above 50 indicate expansion in that sector. I ran a regression of quarterly GDP growth on quarterly average manufacturing PMI and non-manufacturing BAI and I get:

GDP growth = 0.58+0.09*(PMI-50)+0.28*(BAI-50)

Plugging in a guess of 60 in each index for 2010Q2 (which is now two-thirds over), I get 2010Q2 GDP growth = 4.2%. Let's guess productivity growth = 1.5% at an annual rate; that gives us 2.7% growth in employment (annualized) or 300,000 net new jobs per month (we had +290,000 in April). Sounds right to me.