Holiday teddy bears and candy canes may have influenced the outcome, but the country's manufacturing activity rose sharply in December, nonetheless.
The Institute for Supply Management (ISM) reported today that its Manufacturing Index soared to 54.7 in December, up from 49.2 in November. Only 50.1 was expected.
What does this mean? A number above 50 indicates that manufacturing activity in the country is growing. The higher above 50, the more manufacturing is growing. (In general, 55 is considered quite a strong number.) A number below 50 indicates that manufacturing is contracting. We'd been below 50 since September.
The monthly Manufacturing Index may be the most important privately released number that Wall Street and economists watch (most all other measures of the economy are released by the government). As soon as it was released this morning, investors had hope that the economy would be stronger this year, and bid stocks higher.
The institute says it doesn't understand why the number jumped, but one of its sub-indexes that measures new orders also jumped in December, to 63.3 from 49.9. This gives some analysts hope that these results were not a seasonal aberration.
Although this stuff can be exciting to watch, just as baseball games in early April can be fun, Fools should keep their minds firmly affixed to the long term when buying stocks (as we do in Stocks 2003). That said, after the last three years, we happily welcome this good start to 2003, whether it lasts or not.
