Manufacturing expands!

The Institute for Supply Management reported that, for the first time in 19 months, the U.S. manufacturing sector expanded last month, the ISM manufacturing index rising above the 50-level separating contraction and expansion, from 48.9 in July to 52.9 in August.
This move increases the likelihood that the current recession will be declared over within a month or two of this event, as was the case for the last five recessions going all the way back to the mid-1970s, though difficulties clearly remain for the U.S. economy.

From the report:

The August index of 52.9 percent is the highest since June 2007. The 4 percentage point increase was driven by significant strength in the New Orders Index, which is up 9.6 points to 64.9 percent, the highest since December 2004. The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand."

While it's not clear how much optimism should be derived from the characterization of "sustainable in the short-term", it is certainly good news for those working in the manufacturing industry, attention now turning to Friday's labor report to see what, if any, impact will be seen in manufacturing employment.

Here are the details:
Employment remains one of the weakest categories, however, it is contracting at a lesser rate than the prior month and is much improved from earlier in the year.