According to the Associated Press wire, “The U.S. economy already has been showing renewed strength. Economic growth clocked in an impressive 4 percent annual pace from April through June after getting off to a bad start the first three months of the year. And the Labor Department said Friday that employers added more than 200,000 jobs in July for the sixth straight month. Factories created 28,000 jobs in July, most since November. Over the past year, manufacturers have added 178,000 jobs, best 12-month stretch of hiring since November 2012.”The Institute for Supply Management (ISM) recently reported a 1.8 percent increase in the manufacturing index, which brought the total to 57.1 percent for July. The latest numbers reveal the highest output increase since April 2011.
A report by Bloomberg’s Business week states, “Manufacturing has grown for 13 straight months, but the pace of the expansion slowed in June from 55.4 in May. Growth in production and exports decelerated. Orders rose faster, and factories added jobs at the same pace they did in May, the ISM reported.”
Economists warn that the United States is not out of the woods just yet. The latest reports incite a cautious optimism; American factory owners must still work hard to reduce any lingering trade deficits, which continue to run high.
Possible doubts may be reflected in the results of the Purchasing Manager Index (PMI), which shot down by 1.5 percent (from May) to a total of 55.8 in July. Although readings above 50 still indicate growth, the marks could point to inventory woes.
In addition, NASDAQ notes, “Inventory accumulation was a major source of growth in the second quarter, accounting for 1.66 percentage points of the 4.0 percent annualized increase in real gross domestic product. The ISM reading suggests manufacturers are working off those inventories in the third quarter.”