The December 2010 ISM Manufacturing Survey is out and PMI came in at 57%. November 2010 manufacturing ISM was 56.6%. This is a +0.4% increase in the factory index, or PMI, the overall manufacturing ISM index. While this is the 17th month for expansion (anything above 50 is an expansion), the good news is not trickling down to workers.

This is what the Institute of Supply Management said about their ISM manufacturing survey report. Notice the comment that the weaker dollar is helping exporters.

The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle. Additionally, manufacturers that export have benefited from both global demand and the weaker dollar. December's strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.

New orders jumped 4.3 percentage points to 60.9%. That's pretty good!

Production, which is the current we're makin' stuff now meter, jumped 5.7 percentage points to 60.7%. This is also great news.

Below is the ISM table data, reprinted, for a quick view.

Now we come to employment. If manufacturing has expanded for the last 17 months, where are the damn jobs? Hiring dropped 1.8, percentage points from November, now at 55.7%. If new orders are up, production is up, obviously these manufacturers are offshore outsourcing the jobs and squeezing workers. Again, anything above 50 is expansion, but these numbers have barely broke the hiring mark. December is reporting a hiring slowdown, or a slowing of hiring new people. This is not good, beyond the metric, it's especially not good when we see just great numbers on manufacturing. That means somehow they have managed to increase production without adding to their workforce. Notice how order backlogs are below 50, these manufacturing companies are keeping up with the pace without hiring American workers. Below is the ISM manufacturing employment graph so you can see the trend line.

Inventories, in the below St. Louis FRED graph, decreased 4.9 percentage points to expansion, 51.8%. The ISM says inventories above 42.6% indicate expansion, but this is a slowing on inventory growth by rate. Q3 2010 GDP growth was 63% inventory expansion. Seeing new orders increase, in relation to inventories decreasing is a positive sign for real economic growth versus inventory level changes being attributed to economic growth.

Exports & imports decreased, both 2.5 percentage points, with exports now being at 54.5% and imports at 50.5%, both expanding, but at a slower pace than November. Increasing production for export could help with the trade deficit, which literally wipes out U.S. economic growth.

The ISM neutral point is 50. Above is growth, below is contraction, although the ISM is this report is noting some variance in the individual indexes (see their report). For example, A PMI above 42, over time, also indicates growth.

The ISM always selects some classic quotes from the manufacturers they survey and this is no exception. Check out what someone in nonmetallic Mineral Products said:

Business remains slow, while vendors clamor for increases that should have no foundation in economics.

Has no foundation in macro, micro or international economics stopped anyone previously? No. Let's all go to school at this point and start over. Calculators and spreadsheets please.

The ISM has much more data and tables, on their website.