“The overall sense is that real progress in economic recovery is being made and the future looks brighter,” said NACM Economist Chris Kuehl, PhD about the July CMI report. Significant readings within the favorable factors, notably sales and new credit applications, seem to promise better days ahead. The unfavorable factor index details are also instructive, though not as dramatic. The good news is that all of the factors that had fallen into contraction (below a level of 50) improved in the July CMI.
A growing sense of confidence in the progress of the economy exists at present, according to Kuehl, although there are still many who see “dark clouds” in the future. “The latest data releases all seem to point toward the kind of rebound expected by analysts at the start of the year,” said Kuehl. “The CMI has joined this parade with a set of readings that mark highs not seen in over a year in some cases. Given that the CMI is often predictive, it would appear that economic conditions for the coming months will continue tracking in a positive direction.”
As for those dark clouds: “Not to rain on the parade, these numbers also looked good at the start of the year, and it has taken until mid-summer to regain that momentum,” he noted. “The rebound in exports played a major role in getting the US back to growth, but the caution is that many of those importing nations are still not in very good economic shape.”
For a full breakdown of the manufacturing and service sector data and graphics, view the complete June 2014 report at http://web.nacm.org/CMI/PDF/CMIcurrent.pdf. CMI archives may also be viewed on NACM’s website at http://web.nacm.org/cmi/cmi.asp. An extended version of this story will also appear in forthcoming edition of NACM’s eNews, available weekly during Thursdays' late- afternoon hours.