Yesterday, I wrote about the latest ISM manufacturing report. The above chart shows why I think this is an important data series. I've compared the ISM monthly index to the year over year percentage change in GDP. Notice that the data series follow each other pretty closely. It's not an exact match, but there is some similarity.
The above chart is the ISMs new orders index and the YOY percentage change in GDP. The relationship here is a bit weaker, although it still exists. For example, notice the big jump in new orders coming out of the 2000 recession that wasn't followed by a bug jump in GDP. However, the relationship did exist coming out of the early 1980s and 1990s recession.
The above chart is the ISM's production index relative to YOY GDP. Again, we see a general correlation.
The above charts indicate that the ISM is a decent, coincident indicator of GDP.
