ISM Report: Manufacturing Comeback Continues

From today's ISM report on U.S. manufacturing, which came in above consensus expectations: Economic activity in the manufacturing sector expanded in March for the 32nd consecutive month, and the overall economy grew for the 34th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.Manufacturing continued its growth in March as the PMI registered 53.4 percent, an increase of 1 percentage point when compared to February's reading of 52.4 percent (see chart above). A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.According to ISM's Bradley Holcomb, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (53.3 percent) corresponds to a 3.6 percent increase in real GDP. In addition, if the PMI for March (53.4 percent) is annualized, it corresponds to a 3.7 percent increase in real GDP annually."MP: The ISM production and employment indexes are showing strength, and are both listed as "growing faster" for March.  Likewise, the "overall economy" and "manufacturing sector" are both described by the ISM as "growing faster" for March, suggesting that economic growth will continue and possible accelerate in the months ahead.  The above-expected strength in American manufacturing activity according to today's ISM report provides additional support that the industrial sector is at the forefront of the economic expansion.