February 2018 Institute for Supply Management

Economic output continued expanding in February 2018 according to the latest releases from the Institute for Supply Management (ISM).  Both of their surveys recorded tallies well above 50.0, a level indicative of no discernable change.  Manufacturing’s reading was 60.8, accelerating from 59.1.  Meanwhile, non-manufacturing decelerated a smidgen to 59.5 from 59.9 in January.

Manufacturing’s details suggest the American economy is humming along nicely.  New orders (a forward-looking component) reached 64.2.  This is in addition to growing backlogs which are at 59.8, a 14-year high.  With requisitions piling up, firms are hiring new workers, causing the employment reading reached 59.7.  Exports increased to a seven-year high of 62.8, and import orders hit an 11-year high of 60.5. 

Over on the non-manufacturing side of the economy, there are no signs of slowdown from the ISM.  New orders reached 64.8.  Export orders were strong as well, rising to 59.5.  Backlogs are growing on this side of the economy also, hitting 56.0 which is elevated for this portion of the report.  Interestingly, employment data decelerated here, falling to 55.0 from 61.6 in January which contradicts the strength in the Bureau of Labor Statistics’ most recent monthly report.

Data from the ISM create a positive narrative for our economy.  An upward trend is firmly footed on both sides of output.  Additionally, employment data remain strong (even with the setback in the non-manufacturing tally).  Currently, there is no end in sight for the current expansion which started nearly nine years ago.