The Markit Flash U.S. Manufacturing Purchasing Managers' Index this month recorded its strongest reading in over four years, according to a Markit report (link opens as PDF) released today.
The "flash" estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. An above-50 reading indicates general growth, while below 50 signals contraction.
This month's report clocked in at 57.5, a 1.1-point improvement over May's final reading and exactly one point above analyst expectations.
June's jump came from all the right components. The all-important new orders soared 2.9 points to reach 61.7, while output added 1.4 points to hit an even 61. Both output and new orders also hit four-year highs. In a longer-term sign of stable improvement, output's average second-quarter 2014 growth is the strongest ever seen by Markit, which began collecting index data in early 2007.
"U.S. industry is booming again, with the flash manufacturing PMI hitting its highest for just over four years in June," said Markit Chief Economist Chris Williamson in a statement today. "The strong reading also rounds off the best quarter for factories for four years, adding to indications that the US economy rebounded strongly in the second quarter from the weather-related weakness seen at the start of the year." Williamson was quoted as saying the Markit data suggest GDP "should be set to rise by at least 3% after the 1% decline in the first quarter."
The Markit report coincides with today's strong national economy report from the Chicago Federal Reserve Bank. Investors will be watching Wednesday's GDP growth report from the federal government, the third update on Q1 performance, to see whether these latest signs of strength are corroborated by the all-encompassing gross domestic product.