The monthly Purchasing Managers Index for June makes for a third successive increase, and a further sign that the economy has turned. June’s 51.8 is up from May’s 51.2 and its highest since July 2008.
Two aspects caught this Bystander’s eye: first, export sales rose for the first time since July last year, and there was an increase in manufacturing employment; both rises modest, but rises; second, inventories of finished goods were on the rise. The latter is, if not worrying at this point, at least a number to keep an eye on as it is untypical and puts at question the sustainability of the renewed growth if that, as rising inventories would suggest, is being driven by stimulus spending flowing through to construction rather than real domestic or foreign demand for manufactures.
