The global PMI index is produced by JP Morgan with input from . . . → Read More: Purchasing Managers Worldwide: Manufacturing Blossoming]]> Global factory activity continues to accelerate. According to business managers worldwide, manufacturing vivification is now at the highest rate in nearly four years and new orders growth is now at a rate not seen in more that five and a half years.

The global PMI index is produced by JP Morgan with input from research and supply management organizations around the world. The firm’s report on its PMI was released on Monday and combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

“December PMI data indicate that the global manufacturing sector approaches 2010 on a positive footing,” said David Hensley of JP Morgan.

The global employment index has also moved into positive territory for the first time since March 2008, indicating net job growth on a global scale.

Earlier on Monday additional data showed Chinese manufacturing activity expanded at the fastest rate on record in December.

Also on Monday, the Institute for Supply Management said the U.S. manufacturing sector grew for a fifth month in December, with the index hitting its highest level since April 2006. If the ISM’s PMI for December is annualized, it corresponds to a 4.6% increase in US GDP annually.

Perhaps the best news in the ISM report is new orders level which — despite a run of very strong gains in prior months — jumped again. The new order strength points to continued rising activity in the US manufacturing sector in the months ahead.

Production continues to show strong monthly gains and firms now report adding to their workforces again.

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The new orders have also held to over . . . → Read More: Jobs Growth in Chicagoland]]> The Chicago ISM survey of area purchasers was released on Wednesday. The purchasers manager’s index (PMI) rose sharply, up nearly 4 points to 60.0. This Chicagoland index has now posted gains for three months straight — all at accelerating rates (60.0 Dec, 56.1 Nov, 54.2 Oct).

The new orders have also held to over 60 for three straight months. This is actually quite surprising given that each month’s comparison is increasingly difficult to maintain such acceleration. Any reading above 50 indicates month-to-month growth.

Order backlogs were also strong in today’s report — month-to-month growth indications that a slowdown is not in store anytime soon.

We have been laser focused on jobs recently. The report indicated that employment jumped more than 9 points in the month to 51.2. That level is indicative of month-to-month net hiring.

Like the Texas report earlier this month, the Chicago area readings underscore a return to payroll expansion this December — likely confirmed in next week’s employment report.

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Overblown concerns about Dubai defaults are quickly shifting to the into the shadows. On Tuesday clarity on the extent of the loan restructuring indicated that Dubai World likely would restructure debt worth $26 billion against earlier talk of a possible $59 billion . . . → Read More: Dubai Fears Fade: Positive Economic Data Builds]]> What a difference a few days have made in the mainstream headlines.

Overblown concerns about Dubai defaults are quickly shifting to the into the shadows. On Tuesday clarity on the extent of the loan restructuring indicated that Dubai World likely would restructure debt worth $26 billion against earlier talk of a possible $59 billion default.

Moving to center stage was a string of economic good news on Monday and Tuesday.

To kick off the week, gains in new orders were the highlight of November’s Chicago purchasers’ report. Chicago’s PMI rose nearly 2 points to 56.1 to indicate another strong month-to-month increase in the pace of overall business activity in that area of the country. New orders rose 1.4 points to a very strong 62.8. The Chicago survey includes both service and manufacturing segments of the economy in its report.

Contrary to a more gloomy consensus forecast, reports Tuesday showed a continued rebound for the auto sales even in the absence of government incentives. Sales of domestic-made vehicles came in at an 8.2 million annual rate in November, considerably above the 7.9 million rate in October.

On the retail front, Redbook reported strong results for the Nov. 28 shopping week. Redbook’s year-on-year measure for the week is up 3.8 percent and week over week up 1 full percentage point! (That’s 52% annualized). No doubt this is the strongest retail rate of the year and Redbook projects an exceptionally strong 5.2 percent rise in November vs. October. (That’s a heady 62% annualized)

Indications in the manufacturing sector continue to point to strength with ISM’s report showing continued momentum. The manufacturing new orders component of the index (the report’s leading indication for future activity) continues higher to 60.3 for a 1.8 point gain. Acceleration in new orders and gains in backlogs show a healthy mix pointing to rising production and rising employment ahead. Employment continues much improved from earlier in the year, holding above 50 in November from October’s very strong level of 53.1. You’ll remember the past relationship between ISM’s PMI and the overall economy. If the correlation to the PMI for November is annualized, it corresponds to a 3.9 percent increase in real GDP annually.

Then home sales reports were released. You may remember that existing home sales got a giant boost in October as speculation increased that the homebuyer’s credit expiration would pull sales forward and then dip in subsequent months. But to the contrary Tuesday’s report points to continued strength ahead. Pending home sales jumped nearly 4% in October adding to September’s 6% gain. Year-on-year pending home sales are now up a robust 32%.

Then early Tuesday afternoon, Philadelphia Federal Reserve Bank President Charles Plosser gave his views on monetary policy. Plosser (like us) sees economic recovery to be a little more modest than many gloomy economists. Said Plosser, “Looking ahead to next year, I expect real GDP growth from the fourth quarter of this year to the fourth quarter of 2010 to be about 3 percent. I expect similar real GDP growth in 2011. These rates of growth are more modest than what some forecasters anticipate.”

This economic recovery continues to build momentum. No surprise here. ]]> http://www.citizeneconomists.com/blogs/2009/12/02/dubai-fears-fade-positive-economic-data-builds/feed/ 0