Today the Institute for Supply Management published its December Manufacturing Report. The latest headline PMI at 57.0 percent is a slight decline from 57.3 percent last month, which was the best reading since April 2011, thirty-two months ago. Today's number matched the Investing.com forecast of 57.0.

Here is the key analysis from the report:

Manufacturing expanded in December as the PMI™ registered 57 percent, a decrease of 0.3 percentage point when compared to November's reading of 57.3 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December PMI™ indicates growth for the 55th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the seventh consecutive month. Holcomb stated, "The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through December (53.9 percent) corresponds to a 3.7 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for December (57 percent) is annualized, it corresponds to a 4.6 percent increase in real GDP annually."

Here is the table of PMI components.

I'm reluctant to put too much focus on this index for various reasons, but they are essentially captured in Briefing.com's Big Picture comment on this economic indicator.

The chart below shows the Manufacturing Composite series, which stretches back to 1948. I've highlighted the eleven recessions during this time frame and highlighted the index value the month before the recession starts.

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For a diffusion index, the latest reading of 57.0 indicates moderate expansion. What sort of correlation does that have with the months before the start of recessions? Here are the eleven data points for the months before recessions arranged in numeric order with the latest data pointed inserted in the sequence (highlighted in red).

42.1, 44.8, 45.7, 47.2, 47.8, 48.5, 49.2, 50.5, 50.7, 53.2, 57.0, 66.2

Today's reading is near the upper end of the range, with ten lower and one higher.

How revealing is today's 0.3 point change from last month? There are 791 monthly data points in this series. The average month-to-month point change is 2.0 points. So month-over-month change in today's headline PMI number is of little statistical insignificance.

Here is a closer look at the series beginning at the turn of the century.

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To reiterate the Briefing.com assessment: "The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle." The ISM reports nevertheless offer an interesting sidebar to the ongoing economic debate.

Note: I use the FRED USRECP series (Peak through the Period preceding the Trough) to highlight the recessions in the charts above. For example, the NBER dates the last cycle peak as December 2007, the trough as June 2009 and the duration as 18 months. The USRECP series thus flags December 2007 as the start of the recession and May 2009 as the last month of the recession, giving us the 18-month duration. The dot for the last recession in the charts above are thus for November 2007. The "Peak through the Period preceding the Trough" series is the one FRED uses in its monthly charts, as illustrated here.