July ISM Manufactures Report Highest Since August 2008

A huge rebound in this months ISM Manufacturing report solidifies the believe that not only has the recession ended, but that the economy will rebound in a V shaped pattern. The report came in at 48.9 which was way above the 44.8 in June and the consensus expected increase of 46.2. With new orders, production, export orders, and backlog now above 50 its only inventory levels that is keeping the report below the growth level of 50. Check out the report from First Economic Trust - Brian Westbury for more details on the V shaped recovery that almost nobody was giving a chance until just the last week. The graphs sure look like Vs to me.

Those inventories will have to be restocked soon and that will really boost the economy. The imbalance of new orders at 55 and inventories at 33 can't last for much longer.

• The Institute for Supply Management, a trade group of purchasing executives, said Monday that its manufacturing index read 48.9, up from 44.8 in June. That's better than the 46.2 reading analysts polled by Thomson Reuters expected.
• The pace of decline has been slowing since the index hit a 28-year low of 32.9 in December. And it was the third straight monthly reading above 41.2, which tends to indicate expansion in the overall economy if sustained at such levels, according to the ISM.
• In July, new orders and production hit their highest levels since the summer of 2007, while new export orders tipped into growth territory after shrinking for nine months.