Today, CNBC's Steve Liesman nearly had a coronary while announcing the latest ISM manufacturing data, suggesting that the employment index breaching 50 could “change the calculus” for Friday’s employment situation report… the markets reacted with a customary frenzy ebullient bullish buying.But… the employment index appears more than likely to be simply “juiced” by the government’s historic stimulus efforts.
Looking at the following Blytic chart (click for fullscreen player) you can see that in the past several recessions, the manufacturing employment index did not signal expansion until well into the post-recession period with a minimum of 5 months of down trending unemployment.
Given the circumstances, it is more likely that manufacturing swung into expansion as a result of the cash for clunker “autos and homes” programs and resultant dynamics and not organic economic expansion.
