Forum Archive

June 2 (Bloomberg) — The U.S. recession that began in December 2007 may have ended in May, said John Ryding, using the Institute for Supply Management’s factory index as a guide.
Readings greater than 41.2 on a sustained basis are usually
consistent with economic expansions, according to the Tempe, Arizona-based purchasers’ group. The CHART OF THE DAY shows
May’s reading of 42.8 surpassing the horizontal red line at the 41.2 mark. The vertical lines show the end of previous recessions and beginning of expansions.
The ISM gauge “is the greenest shoot yet in the recession-
drawing-to-a-close thesis,” Ryding, chief economist at RDQ
Economics LLC in New York, said in a note to clients yesterday.
“The ISM report is a very important indicator of the cyclical
state of the economy and it tentatively suggests that May is a
plausible candidate for the recession trough.”
What’s more, two of the most forward-looking components of
the ISM index are also flashing recovery, Ryding said. The
orders index climbed to 51.1, above the 50 breakeven level for
the first time since the month before the recession started. In
addition, the measure of supplier deliveries, a component of the
Conference Board’s index of leading economic indicators, gained
almost five points.