For the better part of a year, the professional forecasting class insisted that American factories were about to be strangled by tariffs. July’s numbers say otherwise. U.S. manufacturing activity climbed to its highest level in more than four years last month on the back of strong order growth, according to data from the Institute for Supply Management, with manufacturing employment landing at a near three-year high — a combination that does not describe an industrial base in retreat.
The Manufacturing Purchasing Managers’ Index rose to 55.6 in July from 53.3 in June, the highest reading since May 2022, as Just the News reported. Anything above 50 signals expansion. Nearly six points above it, after a year of collapse predictions, signals something closer to a boom.
The strength was not confined to one lucky corner of the economy. Growth was recorded in fifteen manufacturing industries, including electrical equipment, appliances and components, primary metals, transportation equipment, machinery, and computer and electronic products. Activity in the technology sector was driven by the artificial intelligence buildout — the data centers, chips, transformers and cooling systems that have to be physically manufactured by somebody, somewhere, and increasingly are being manufactured here.
That breadth matters. A one-industry spike can be dismissed as a fluke or a subsidy. Fifteen industries moving in the same direction at once is what a genuine cycle looks like, and it is precisely the outcome that the tariff-doom commentary spent the year ruling out.
None of which means the shop floor is euphoric. Despite the strong growth data, responses to the ISM survey published Monday were overwhelmingly negative. The war in Iran came up often in the comments, as did price volatility — the two things manufacturers cannot hedge and cannot control. It is a familiar split: the hard numbers are good, and the mood is sour.
Which is worth pausing on, because sentiment has been doing an enormous amount of work in economic coverage lately. When surveys of feelings were weak and the output data was strong, the feelings led the story. The output data has now been strong for long enough that the story has to be rewritten, and the rewriting is happening quietly.
The Federal Reserve is the next question. Some economists were confident the central bank would raise interest rates as soon as next month — a debate that only exists because the economy is running hot rather than cold. A year ago the same commentary was pricing in emergency cuts to cushion a manufacturing recession that never arrived.
The recession chorus is not going to issue a correction. It will simply move on to the next forecast, and the factory floors that were supposed to be shutting down will keep hiring.
Source: justthenews.com
