Solid print for August with the Headline ISM rising for a 5th month, Current Production hitting a 32-month high and New Orders spiking to the highest level since Jan 2004.
The Employment series remained underwhelming, rising +2.1 pts while remaining mired in contraction for a 13th consecutive month at 46.4 – although a more conspicuous employment recovery is likely to follow a renormalization in activity/order flow, not the converse.
Meanwhile, Inflation’s percolation was evident as Prices Paid ramped towards late 2018 levels with essentially all commodities prices accelerating.
Recall, 50 marks the expansion-contraction demarcation line and the extent of recovery in the peri-shock period can be reasonably gauged using an integral approach . That is, has the recovery progressed such that the area above the 50-line during the recovery phase is equal to or greater than the area below the 50-line during the contractionary phase. The August data takes a big step towards pushing net area positive.
In any case, the demand recovery remains somewhat bifurcated and choppy as evidenced by the respondent commentary (below) but progressive improvement remains the underlying trend. And while the prospective durability of improvement remains debatable and precarity continues to (increasingly) define the larger macro-scape as we push past the main thrust of the mechanical rebound/step-function sequentials, the present slope of the line is positive and with New Orders/Backlogs Up and Inventories down, pipeline activity is ostensibly solid.
