The ISM Manufacturing report released today showed economic activity in the United States manufacturing sector expanded in August for the 25th straight month, and the overall economy grew for the 27th consecutive month.
The manufacturing PMI index recorded a number of 50.6 percent which was more than the expected 48.5 figure. Above 50.0 indicates industry expansion, below indicates contraction. However this was a decrease from July’s 50.9 number, just a marginal amount through of 0.3 percentage points, meaning the expansion was at a slower pace than prior month.
The ISM manufacturing PMI is an important indicator since it shows economic health as purchasing managers have access to the most current and relevant insight into the company’s view of the U.S. economy.
The index is compiled based on a survey of about 400 purchasing managers who are asked to give a rating of the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
The dollar extended gains versus the yen after the data. The dollar rose 0.6 percent to 77.05 yen, up from 76.88 yen earlier.
Meanwhile the briefly hit a high of 1.4315 compared with 1.4288 before the data. It later pulled back to 1.4277, down 0.7 percent on the day.
Even the Mexican peso strengthened again the greenback since the U.S. is a major trading partner. The peso strengthened as much as 0.82 percent to 12.2442 per dollar.