Will ETFs Gain On Upbeat US Manufacturing Data For August?

The latest ISM Manufacturing Purchasing Managers' Index (PMI) data for the United States is painting a rosy picture for the industrial sector. The metric rose to 59.9 in August from 59.5 in July and surpassed forecasts of 58.6, per a Reuters article.

Worker, Grinder, Factory, Workplace

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Any reading above 50% indicates expansion in U.S. manufacturing activities. Notably, the manufacturing sector, which makes up 11.9% of the U.S. economy, saw the reading witnessing the 15th consecutive month of growth. The six biggest manufacturing industries — Computer & Electronic Products, Fabricated Metal Products, Chemical Products, Food, Beverage & Tobacco Products, Transportation Equipment, and Petroleum & Coal Products — delivered moderate to strong growth in August.

The New Orders Index climbed to 66.7%, up 1.8 percentage points from the July reading of 64.9%. The Production Index recorded at 60% rose 1.6 percentage points from the July reading. The Backlog of Orders Index touched 68.2%, 3.2 percentage points higher sequentially. However, the Supplier Deliveries Index reading was 69.5%, decreasing 3 percentage points from the July figure.

How is U.S. Economy Presently Placed?

U.S. consumers seem worried about the sustainability of economic recovery from the pandemic-led slump, surging delta variant threat and increasing inflation levels. Consequently, the consumer confidence in the United States slipped to a six-month low in August. The Conference Board's measure of consumer confidence index stands at 113.8 (the lowest level since February), comparing unfavorably with July’s reading of 125.1.

The virus variant remains a serious concern as the number of cases is rising in the United States. The new cases arising from the delta variant are being mostly observed among the unvaccinated population. Going by Johns Hopkins University data, the United States is witnessing an average of 160,000 new COVID-19 cases a day, per a CNN report.

The resurging cases might scare investors as they worry about implementation of new lockdown measures to control the spread, which may hurt the global economic recovery achieved so far.

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