ISM Employment Index

The market has made a nice run of late on the strength second quarterly earnings from a number of companies. Economic numbers from GDP to housing starts are improving. The question everyone is asking is whether we have turned a corner as the markets are leading us to believe.

At 10am EST the ISM Manufacturing Report on Business numbers come out for July. The key number to focus in on is the employment index number. Employment is at the core for any economic picture, and July's numbers will need to show improvement from June's 40.7 score to paint a clearer picture of what is happening in the manufacturing sector.

The manufacturing employment index bottomed out in Februrary, and has improved every month since. This may be a result of companies churning through existing inventories to the point where they have to ramp up production, which means hiring.

The ISM employment numbers represent a good barometer of employment activity because the survey is mainly built on the sentiment of purchasing managers. Who better to know the employment picture than the ones that actually do the hiring. Manufacturing employment is just one measure. I'll be focusing in on the Non-Manufacturing ISM Employment index numbers which come out in a few days to see if there any signs of employment stabilization. Stabilization and recovery are two different animals.