The ISM manufacturing index beat the street rising to 51.4 percent in December, up from 49.5 percent in November.
This is very good news. Economists were expecting the index to remain below 50 percent at 49.5 percent. (Anything north of 50 signals expansion.)
Production and new orders both increased, while prices fell.
What used to be called the Purchasing Manager’s Index is now called the Institute of Supply Management. It’s one of the best real-time economic stats out there—not from the government, mind you, but from private manufacturing businesses.
On another note, President Bush’s op-ed today in the Wall Street Journal argues that his tax cuts fueled economic growth while simultaneously spurring record tax revenues. The bottom line? The budget deficit has plunged while the economy has soared.
Think of it as the Bush Boom—think of it as another “W” in the win column for supply-side economics and the Laffer Curve.
At lower tax rates, economic behavior responds with more work and greater investment. Our expanding economic pie throws off more tax revenues, even at these lower tax rates.
In his op-ed, Mr. Bush also pledged to clamp down on budget spending and corrupt earmarks. He’s aiming for a balanced budget plan by 2012. (I think it could happen sooner). He asks the Democratic Congress for bipartisan cooperation but if not, he clearly threatens to use his veto pen.
Good plan, President Bush.