New data out this week suggests the US economy is on the verge at expanding at its fastest rate in almost 13 years.
It was told here yesterday, how the eurozone economy is finally in the midst of a strong recovery. The latest purchasing managers indexes (PMIs) tracking manufacturing in the region are now at their highest level since the euro area was formed.
Yesterday, we received the latest reading on the purchasing managers indexes tracking US manufacturing – from the US Institute of Supply Management (ISM). This index is closely watched.
And the index surged – rising to 59.7 – any score over 50 suggests growth, anything close to 60 suggests a sector that is booming – and indeed the PMI went close to a 13-year high.
Andrew Hunter, US Economist, at Capital Economics said: "The manufacturing sector is benefitting from the resurgence in global GDP growth over the past year, along with the boost to exports from the dollar’s seven per cent depreciation in trade-weighted terms in 2017. That boost looks set to continue, with the new export orders component of the ISM index pointing to real export growth of around seven per cent year on year over the coming months.”
We will get the latest PMI from ISM covering US services tomorrow. This will tell us more, but the first piece of major data this year, certainly points to a US economy that is looking strong indeed.
It is not just the PMIs that are booming. In November another closely watched index turned in a spectacular performance, with the US consumer confidence index from the Conference Board rising to a 17-year high. The index did dip a tad in December, but even so, when one highly credible index tracking manufacturing hovers at a 13-year high, another tracking consumer confidence is around a 16-year high, you know the US economy must be getting strong.