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Economy in Brief

ISM Index Recovered in July
by Tom Moeller August 1, 2006

In July, the Composite Index of factory sector activity more than recovered the prior month's decline and rose to 54.7, reported the Institute for Supply Management. Consensus expectations had been for a slight decline to 53.5.

During the last twenty years there has been a 68% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.

The production index rose to 57.5, the highest level since April but new orders gave back half of a June increase. New export orders fell to the lowest level (51.9) since June of last year.

The employment index recovered half of the prior month's decline and rose to 50.7. During the last twenty years there has been a 66% correlation between the level of the ISM employment Index and the three month growth in factory sector employment.

The price index surged to the highest level (78.5) since last October. During the last twenty years there has been a 91% correlation between the price index and the three month change in the PPI for intermediate goods less food & energy.

ISM Manufacturing Survey July Jun July '05 2005 2004 2003
Composite Index 54.7 53.8 56.4 55.5 60.5 53.3
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