Factories Operate Near 20-Year High

Reuters via Yahoo News ^ | 3/1/2004 | Eric Burroughs

[PeteFromMontana]

Factories Operate Near 20-Year High

20 minutes ago

By Eric Burroughs

NEW YORK (Reuters) - U.S. factories boomed at close to a 20-year high in February, according to a survey released on Monday that also suggested a turnaround in hiring may be on the horizon after a three-year struggle.

The Institute for Supply Management said its monthly manufacturing index fell to 61.4 in February from January's two-decade high of 63.6, showing the ninth straight month of expansion in the sector that makes up less than a fifth of the U.S. economy.

Even though the index fell below the 62.0 level forecast by economists, the strength of the survey's components gave a lift to stocks and hurt safe-haven U.S. Treasuries. A reading above 50 in the index shows expansion. All 20 industry sectors in the survey also showed expansion.

"It appears that the manufacturing sector has sustainable momentum at this point," said Norbert Ore, ISM's manufacturing survey director.

The other ISM indexes also showed manufacturers gaining enough confidence to hire workers and the outlook for future growth was bright, though a rapid rise in prices may be squeezing profits.

The employment index jumped to 56.3 in February -- the highest since December 1987 -- from January's 52.9. ISM's Ore said more and more factories were reporting hiring though it has yet to show up in government employment statistics.

Even as the ISM report and other regional surveys have shown a pick-up in jobs during the past two months, the government's payrolls survey showed a 38,000 decline in manufacturing jobs nationwide.

Ore said there are "a lot of comments about people doing some hiring." The February U.S. payrolls report will be released Friday and economists forecast a 125,000 rise.

Two things are worrying manufacturers, ISM said -- the rapid rise in energy prices and a growing shortage of steel.

The prices index jumped in February to 81.5, the highest since early 1995, from 75.5 and is up almost 20 points in the past four months. Rather than being inflationary, typically such a rapid rise in prices cuts profit margins at factories.

The ISM manufacturing report is based on monthly responses by purchasing executives at more than 400 industrial companies, from textiles and chemicals to paper and computers.

[PeteFromMontana]

Dem's to be on suicide watch today.....

[ECM]

Be interesting what the Spin Machine does with this...

[John H K]

Dem's to be on suicide watch today.....

Take the belts and sharp objects away from the Paleocon BuchanaKerry fans as well....

[writer33]

All of this while we still need 2.6 million jobs. How can this be?

[PeteFromMontana]

Be interesting what the Spin Machine does with this...

Do you mean like this:

U.S. January Personal Spending Rises 0.4%; Incomes Up Bloomberg ^ | 03/01/04 | Bloomberg

Or As Reuters would have you believe: Consumer Spending Growth Slows in January

http://biz.yahoo.com/rb/040301/economy_2.html

[ECM]

Yeah, that sounds 'bout right.

[austinite]

All three factories are really crankin'

[JimRed]

Don't expect to hear it on ABCNNBCBS or the lefty print media...

[Alas Babylon!]

How is this possible? Last night, Billy Crystal told us the economy was tanking!

[CROSSHIGHWAYMAN]

Consumer Spending Growth Slows in January

Spending grew, but the rate of growth was a little slower than expected.

Anybody remember the record cold January?

March is off to a warm start and I expect consumers to respond to the nice weather.

[Cap Huff]

WAGD!!!

[don'tbedenied]

This is getting interesting. The economic numbers are good and getting better, some are fantastically good. The Democrats and their media echo chamber continue to report that the ecomnomy is, as Billy Crystal put it last night, "in the tank". At what point does the media change the story for fear of being humiliated by being so wrong? And if they change the story how do they do it so they don't look stupid? The Democrats and the echo chamber, for political reasons, have to keep the current story line going until Nov. But that's a long time to surpress the truth when good news keeps happening all the time.
So far they've put all their bets on the payroll employment numbers, which is about the only stat that's been negative. Common sense tells you that if all the economic numbers except one are good, the exception is just incorrect.
The other negative economic fact the media is echoing is the loss of manufacturing jobs. This, of course, has been happening since the 70's and will continue regardless of who is President. Manufacturing job losses, like the homeless, seem destined to be discovered only during Republican administrations.
Any predictions on how the media/D's get out of this one?

[oceanview]

its not the loss of manufacturing jobs, its the white collar/tech/big company offshoring that is the biggest factor on job loss and job fears.

[kennedy]

Daschle is saddened, deeply saddened.

[Grampa Dave]

Thanks for posting this.

I posted a thread on how this data is helping most of the indexes go up in today's market:

http://www.freerepublic.com/focus/f-news/1088310/posts

Spring in the Air, (manufacturing index: employment component rose to a 16-year high)
Smartmoney.com ^ | 1 March 2004 | Igor Greenwald


Posted on 03/01/2004 7:56:48 AM PST by Grampa Dave


Spring in the Air

By WALL STREET STARTED March with an uphill jog on Monday, paced by the increasingly confident industrial leviathans and hopes for a job market thaw.

At 10:22 a.m. ET, the Dow was up 55 points to 10639, while the Nasdaq rose 12 to 2042. The S&P 500 moved up 6 to 1151.

Home builders and the commodity complex stayed red-hot, Alcoa's (AA1) 3% gain pacing the blue chips. Hospital stocks required emergency care.

Investors liked the ISM index of purchasing managers, which stayed in boom territory with a reading of 61.4 as the recovery continues to lift the manufacturing sector's fortunes. That was down slightly from the prior month's 20-year high of 63.4. But the survey noted that the sector now boasts "sustainable momentum."

The employment component rose to a 16-year high, a good omen ahead of Friday's all-important monthly jobs report. Demand for workers has so far not grown as fast as hoped by market-watchers or the 8.3 million unemployed.

Low interest rates and tax cuts have eased the wait, propping up consumer spending in the process. Americans earned less the economists expected but spent more than forecast in January, the 0.2% rise in personal income not quite keeping pace with the 0.4% increase in outlays.

Economic optimism has spread to Japan, with Tokyo's Nikkei stock index surging 2% to a 20-month high Monday on upbeat data and the recently weaker yen. Major European markets also closed in on 2002 peaks.

If all else fails, news that a "secret" U.S. task force has launched a new hunt for Osama bin Laden in remote Pakistan prepared the ground for the next "he's been captured" rumor.

Traders need all the excitement they can get after suffering through a six-week consolidation period that has modestly discounted stocks from January's multi-year highs.

[Grampa Dave]

"Be interesting what the Spin Machine does with this..."

They are pointing out that the data was a little lower than expected instead of being near the highest in close to two decades.

Even the articles that show the data have some left wing swipe in the article.

It is killing the left wingers and the uber rightvingers to watch what is happening to our economy.

Young families are now getting income tax refunds back or sending in for refunds. That will be another positive factor in how our economy is improving inspited of the whines from the Gloomers and Doomers.

[don'tbedenied]

We get more off-shoring then we send out, that's why all the numbers are so good. Focusing on individual stories instead of the big picture statistics lead to this sort of thinking. But you've probably predicted the next media/Demo story line -- Dan Rather here: "Don't pay attention to those statistics (just lies and damn lies), listen to JimBob from Dayton, he's supporting his family of 8, plus his handicapped sister, and his job was outsourced to India! Now they all eat dog food while nearby a Halliburton exective plays golf at the country club" Yeah that's the ticket.