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US Manufacturing PMI Picks Up after Gradual Decline

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US manufacturing PMI in July

The July US manufacturing PMI (purchasing managers’ index) report indicates a strong improvement in the US (SPY) (QQQ) (VFINX) business climate after a gradual decline. Manufacturing PMI stood at 53.3 in July compared to 52 in June 2017, which beat the preliminary market expectations of 53.2.

The manufacturing PMI showed a gradual fall between February 2017 and June 2017. In July, it showed a strong improvement and broke the downward slope. The July PMI report was the highest reading since February 2017.

Let’s look at some of the key factors in the manufacturing PMI:

  • Production volume showed a stronger improvement in July 2017.
  • New order growth and export orders improved at a stronger rate during July as compared to June 2017.
  • The employment in the manufacturing sector also posted strong growth in July 2017.

The improvement in manufacturing PMI in July indicated that manufacturing activity picked up in the US economy after a huge decline in past months. Both the improvement in domestic demand and overseas demand helped the manufacturing PMI.

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Performance of various ETFs in July

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500 Index, rose nearly 2% in July 2017. The PowerShares QQQ Trust, Series 1 (QQQ), which tracks the performance of the major US technology companies, rose nearly 4% in July 2017.

In the next part of this series, we’ll analyze Germany manufacturing PMI in July 2017.

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