This morning’s ISM Manufacturing report showed some signs of life. The headline reading came in at 56.2 which was up from 55.7 in August and well into the growth territory (any reading over 50 is consistent with growth). New orders were down to 60.5, but still at healthy levels. Employment was up to 55.4 from 53.3. Overall, there was a lot to like about this report.
The ISM report correlates very tightly with real GDP so this could mean the economy is picking up a bit from here. It’s still a muddle through phase, but the private sector is increasingly carrying the burden as the Balance Sheet Recession has come to its conclusion.