United States PMI December 2016

United States

United States: U.S. manufacturing rises to two-year high in December

January 3, 2017

The ISM manufacturing index advanced strongly in December, signaling a notable improvement in the U.S. manufacturing sector. The indicator climbed to 54.7 from 53.2 in November and also beat market expectations of 53.7. The result brought the ISM index further above the 50-threshold that indicates an expansion and to the highest level since December 2014.

Looking at the details, the report provided even more upbeat results than the headline figure. Both new orders and manufacturing production hit the highest level in more than two years in December and job creation reached its highest level in 18 months. Moreover, inventories decreased to a seven-month low, signaling that a depletion in stocks in December will prompt U.S. goods producers to ramp up production in the coming months, given that growth in domestic demand remains solid.

FocusEconomics Consensus Forecast panelists expect industrial production to have decreased 0.5% in 2016, which is up 0.3 percentage points from last month’s forecast. This year, panelists see industrial production rebounding and expanding 1.8%, which is down 0.1 percentage points from last month’s estimate.

Author:, Senior Economist

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United States PMI Chart

USA PMI December 2016

Note: Composite index in the Manufacturing Report on Business (PMI). Readings above 50% indicate an expansion in the manufacturing sector while readings below 50% point to a contraction.
Source: Institute for Supply Management.

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