PMI Points To Pick-Up In Growth
The US Manufacturing ISM PMI figure for August 2013, of 55.7, was the highest since June 2011 and signalled that economic activity may be picking up significantly. The composition of the index also showed several positive developments, including a new orders figure of 63.2 (the highest since April 2011) and 15 of 18 industries reporting expansion, with the exceptions being industries such as transportation equipment indicating that the government sequester has hurt business. The manufacturing PMI provides a good proxy for real GDP growth, and suggests that headline expansion in August was somewhere in the 3.0% q-o-q annualised range.
Ahead of the nonfarm payrolls employment figure for August, which will be released on Friday, the manufacturing PMI is suggesting that we could see a figure north of the 175,000-180,000 consensus forecast.
Our expectation for a revival in global trade in H213 also appears to be well-placed, with the ISM New Export Orders ( Higher Minus Lower ) pointing to an increase in goods exports through the end of 2013.
|Growth Pointing Up|
|Real GDP % chg y-o-y SAAR And Manufacturing ISM PMI|