CONFIRMED: Manufacturing Is Red Hot, And Payrolls Are Being Understated

Can a recovery be any more obvious?  The frequently leading ISM PMI Composite is at its highest level in more than two decades.  New orders are expanding at the fastest rate of the recovery.  Production trails closely behind.  Backlogs are piling up even more quickly.  New Orders for Export also are expanding at the highest rate in more than two decades, and that’s good news for the US dollar.

Another predictive point is inventory decline, which signals to even more backlogs and production in the future — and also likely means price increases.


Backlogs clearly drive capacity utilisation.

The best news?


Employment Index shows expansion at the most rapid pace since 1973.  This is yet another datapoint to underscore the high likelyhood of labour market understatement.

Coincidentally, inventories of Food, Beverage & Tobacco Products were reported as “too high“, potentially signifying that supplier hoarding may be contributing to current prices, and may provide some much needed downward pressure by letting go some of the overhang.


This post previously appeared at Macrofugue >

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