Is the purchasing managers' index useful for assessing the economy's strength? A directional analysis

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5 Citations (Scopus)

Abstract

The Purchasing Managers' Index (PMI) is one of the key variables to which economists pay considerable attention for assessing US economic activities, particularly, business conditions in the manufacturing sector, Although the PMI has been used to assess the US economy, there is hardly any attempt to evaluate the directional accuracy of the PMI to predict the direction of change in the index of industrial production (IP) and Gross Domestic Production (GDP). We present evidence that the PMI is a useful predictor of the direction of change in the IP, particularly in the recent decade.

Original languageEnglish
Pages (from-to)1302-1311
Number of pages10
JournalEconomics Bulletin
Volume32
Issue number2
Publication statusPublished - 2012 Dec 1
Externally publishedYes

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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