- by New Deal democrat
Just a quick note about two data releases this week, one of which was (apparently) whipsawed by the hurricanes, and the other (surprisingly) was not.
Motor vehicle sales appears to have been whipsawed by Hurricane Harvey, showing a very strong 18.4 million units annualized after a very weak 16.0 units in August:
(Note the FRED data, by contract, is delayed one month so does not yet show September). It's pretty clear these two months should be averaged to get a better idea of the trend, which is a little over 17 million units. Even so, that is an improvement from earlier this year. More importantly, it takes the notion of an immediate recession signal off the table.
ISM manufacturing came it at a very strong 60.8, which is not just the highest reading of this entire expansion, it is the highest since 2004. Meanwhile the new upstart Markit PMI posted at 53.1, a moderately positive number (h/t Doug Short):
The ISM figure once again confirmed the strength shown in the regional Fed indexes, which surprisingly even included Texas. Even PMI's more tepid reading did not appear to be affected by the Texas and Florida hurricanes.
While the regional Fed indexes and ISM manufacturing have been running a little "hot" this year, they do generally correlate well with the manufacturing component of industrial production.
The bottom line is that these are two short leading signals that the economy is doing very well.
