The global economy just keeps on running in high gear.
For the United States, today the ISM Manufacturing Index (Institute for Supply Management) climbed to 59.7 for December, well above the 58.2 in November. (Economists surveyed by Bloomberg had expected a reading of 58.2 as well. In this index anything above 50 indicates that a sector is expanding.) This puts the index at the highest level in three months. For 2017 the index averaged 57.6, the highest reading in 13 years.
The index’s measure of new orders climbed to 69.4, the highest level in almost 14 years, from 64 in November. That strongly suggests that manufacturing strength will continue well into 2018.
In the United Kingdom the Market/Cips manufacturing purchasing managers index dipped to 56.3 in December from 58.2 in November, but the index for the manufacturing sector still finished 2017 with a three-month average of 57, the strongest reading with June 2014.
And yesterday the manufacturing purchasing managers index in the EuroZone for December hit 60.6, the highest level since this survey began in 1997. Businesses in Germany, Ireland, and Austria all reported record growth.
Certainly nothing in these numbers to suggest a slowdown in the global economy.
But this strength does increase speculation on when the Federal Reserve will next raise interest rates. Traders are increasingly pointing to a March move.