January 2019 Institute for Supply Management
Submitted by Atlas Indicators Investment Advisors on February 6th, 2019America’s economy is still burning rarified air despite some deceleration according to the two measures from the Institute for Supply Management (ISM). Each of their readings were above 55 in January 2019, an exceptional level. Anything above 50 suggests growth, and tallies above 55 tend to be much less common.
Manufacturing’s reading bounced back after falling to end last year. While it remains below the lofty levels seen last summer, the 56.6 start to this year is impressive. Details suggest this year got off to a good start as the production tally jumped to 60.5, rising 6.4 points and boding well for gross domestic product. And more growth is likely on the way; the New Orders figure, the leading component of the report, jumped 6.9 points to 58.2.
Services output looked healthy as well with a reading of 56.7 to start the year. While this is a deceleration from December’s 58.0, it is still a strong overall tally. Business activity was at 59.7 and new orders were at 57.7; in full disclosure, these were each lower than a month earlier but are still considered strong. Employment picked up the pace, rising to 57.8 which is in line with the strong jobs figure released from the Bureau of Labor Statistics.
This is a solid start for 2019. Yes, we could nitpick some of the slowing over on the services, but for now, Atlas does not see a reason to be that fussy. America’s economic expansion has no end in sight from the perspective of these ISM releases.
