By the numbers: Economic indicators hit 50-percent benchmark
Aug 3, 2009 4:05 PM
In money news, 50 is the magic number today. First, the Institute of Supply Management (ISM) announced that for July, its manufacturing index increased to 48.9 percent, which puts it on a pace to cross 50 percent this month. The ISM's index measures economic activity in the nation's manufacturing sector. A reading above 50 would indicate an overall expansion.
Also, today the S&P 500 surpassed 1,000, which is a 50-percent rise in value from its low of 666 in March. (The tech-heavy Nasdaq Composite Index today passed 2,000.)
Market historians point out that this is exactly how we would identify the end of this miserable recession. The ISM figure is usually coincident with economic recovery, and stocks, almost magically, tend to anticipate the recession’s end by running up in price.
The big question going forward is the unemployment rate, which, unfortunately, tends to lag the economic cycle. Unemployment peaks just after the end of most recessions, but the Obama Administration isn’t anticipating the fever to break before the middle of next year.–Chris Horymski
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