Is U.S. manufacturing headed into a recession?

Never mind.

People had gotten all bent out of shape because last month the ISM manufacturing index came in at 49.3, below the 50.0 level which separates contraction from expansion.

Now, today, the ISM manufacturing report for February is out and it reports a manufacturing index of 52.3, clearly in the expansion side of the house.

Also from the report:

A PMI in excess of 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. "The past relationship between the PMI and the overall economy indicates that the PMI average for January and February (50.8 percent) corresponds to a 2.8 percent increase in real gross domestic product (GDP) annually. In addition, if the PMI for February (52.3) is annualized, it corresponds to a 3.2 percent increase in real GDP annually."

That first sentence is also key, since it tells us that even the 49.3 reading in January was well above the level (41.9) that indicates a contraction for the overall economy.

In any case, never get too excited by a single report in any data series.

So, my own answer to the question of whether the U.S. manufacturing sector is headed into recession is a clear: No.

-- Jack Krupansky