The ISM’s PMI came in at 58.4 for January, which is significantly higher than I expected (I was thinking it would be around 55). This is the highest number in five years, and it is a clear indicator that the recovery we started seeing in the fourth quarter is showing signs of sustainability. Couple this with the strong GDP numbers that came out last week, and we should see a strong start to the week in the stock markets.

What is a particularly good sign is the increase of the employment index to 53.3, which is the highest level since April of 2006. Manufacturers are starting to bring back employees and fire up capacity, which might start to quell fears of a “jobless recovery”.

Now, not to rain on everyone’s parade, but the other reports coming out this week are actually slightly more important. ISM releases the NMI on Wednesday, and I am anxious to see if the Services sector shows more signs of life (it has been lagging the manufacturer sector in this recovery). The big number is Friday when the government releases the unemployment rates for January. If the rate holds steady near 10%, the luster from the ISM indices will quickly disappear.

Pat Furey is a Senior Category Manager in Ariba’s Global Sourcing Organization. Pat leads the team of global category managers covering direct materials and indirect goods and services.