American manufacturing is continuing to expand, according to a fresh piece of data released Monday morning, amplifying hopes that a broader economic recovery is gaining momentum.
According to the Institute of Supply Management's Report On Business, which tracks economic activity in the manufacturing sector, manufacturing added new orders, employment and production in December. The Report on Business is a benchmark for looking at the manufacturing sector of the U.S., where index levels above 50 signal an expansion of the economy, below 50, a contraction. December's index level is 57; For contrast: in December 2008, the index bottomed out at 32.5. This report signals the 17th straight month of growth.
The report, which surveys roughly 350 companies around the country, doesn't tell you the magnitude of the increase, but rather comes down mostly to an issue of confidence in the economy: there are more jobs, more consumer spending, more GDP.
According to John Silvia, Chief Economist at Wells Fargo, "at this phase of the business cycle where three quarters of everyone thinks that the economy is continuing to expand it doesn't have that much of an impact." For economists still claiming that the "double dip" could be on its way, Silvia thinks this index will stand as an obstacle. "The vast majority of people have moved on and this is an economic expansion."