Latest ISM Data Points To Continiued Expansion

We've had both of the latest ISM numbers released over the last few days.  Let's look only at the anecdotal notes, as these give us some level of insight into what people are thinking and saying about the economy.'

From the services report:

• "Our business is beginning to turn up slightly." (Health Care & Social Assistance)
• "Business seems to be improving; RFQ volume and orders also up." (Management of Companies & Support Services)
• "Continuing to see slight uptrend in activity, primarily related to 1st quarter initiatives started." (Finance & Insurance)
• "Construction market showing some positive signs." (Real Estate, Rental & Leasing)
• "The economy continues to slowly pick up, perhaps at an even faster pace than had been previously projected. New housing permits and business licenses are at a multiyear high, although still lower than pre-recession." (Public Administration)
• "February bouncing back to forecast levels, which was 11 percent over 2012." (Wholesale Trade)
• "Business is picking up; more projects to bid and things are improving." (Construction)

 All seven of the anecdotal points are positive and indicate that the level of business activity is increasing.  Notice that two specifically deal with construction, indicating that the housing market's improvement is very real.

Let's turn to the manufacturing sector:

• "Automotive is still going strong, which allows budgeting for capital equipment." (Machinery)
• "Overall business is good." (Food, Beverage & Tobacco Products)
• "Starting to pick up after a slower than normal year-end." (Miscellaneous Manufacturing)
• "Continuing slowdown in defense spending." (Computer & Electronic Products)
• "More RFQs coming in than the past three months." (Nonmetallic Mineral Products)
• "Workload is growing; need qualified machinists." (Fabricated Metal Products)
• "Europe is still a concern in the auto sector." (Transportation Equipment)
• "Business seems to be on an uptick. The normal seasonal downturn for us has been much shorter and not as severe as in the past four years." (Furniture & Related Products)
• "Demand indicators are robust. Supply is constrained. Pricing is escalating." (Wood Products)
• "Customer demand has softened. At first, that decline was consistent with seasonal patterns but has persisted beyond historical periods." (Chemical Products)

 Like the service numbers, the manufacturing points are mostly positive and indicate an overall uptick in activity.  Notice there are two areas of concern: the sequester and its effect on defense spending and Europe.