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By New_Deal_democrat May 2, 2016 11:11 am
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April ISM manufacturing: further potent evidence that industrial recession is ending
As anticipated by the regional Fed manufacturing reports, this morning's ISM manufacturing report for April showed another strong month for new orders, at 55.8, although not quite so strong as last month:
 
 
This is a pretty good reading for this expansion.  Further, there has never been a recession with a new orders reading over 55, as shown in the graph below, which norms this month's reading to 0.  Further, since business sales data have been kept, there has never been a quarter where business sales declined with new orders this strong:
 
 
Using the much longer series of industrial production, there have only been two quarters - one in 1978, the second in 1986 - where industrial production declined in the face of this kind of strength in new orders:
 
 
Here is a close-up on the last 20 years:
 
 
Inventory liquidation continues to be quite strong (at a reading of 45.5), and is consistent with exiting a recession or downturn:
 
 
This is increasingly strong evidence that the shallow industrial recession is ending.  If industrial production and sales do not bottom by the end of this quarter, I will be very surprised.
 
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