The PMI, the Report's composite index, gives the earliest indication each month of the health of the manufacturing sector. It is an essential component for assessing the state of the economy. Boskin also said the President's Council of Economic Advisors closely monitored the NAPM indexes, especially the New Export Order's Index. Twenty industries in 50 states are represented on the committee. Survey responses reflect the change, if any, in the current month compared to the previous month.
Responses are raw data and are never changed.
The resulting single index number is then seasonally adjusted to allow for the effects of repetitive intrayear variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to nonmoveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. With some of the indicators within this report, NAPM has indicated the departure point between expansion and decline of comparable government series, as determined by regression analyses. These responses are raw data, never revised and not seasonally adjusted since there is no significant seasonal pattern.