Manufacturing activity in the U.S. registered growth for the fourth consecutive month in June, the Institute for Supply Management revealed in a report on Friday, with the index of activity in the sector rising by much more than expected.
The ISM said its purchasing managers index jumped to 53.2 in June from 51.3 in May, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 51.5.
With the bigger than expected increase, the ISM's manufacturing index rose to its highest level since reaching 53.3 in February of 2015.
Rob Carnell, Chief International Economist at ING Commercial Banking, said the number is consistent with a decent but not amazing pace of manufacturing growth.
The notable increase by the headline index was partly due to an acceleration in production growth, as the production index climbed to 54.7 in June from 52.6 in May.
The report said the new orders index also rose to 57.0 in June from 55.7 in May, indicating a faster rate of growth in new orders.
Employment in the manufacturing sector also increased following six months of contraction, with the employment index rising to 50.4 in June from 49.2 in May.
"Admittedly, manufacturing jobs make only a small contribution to the overall employment total," Carnell said. "Nonetheless, this is a small crumb of confidence for our above-consensus 200,000 payrolls forecast."
On the inflation front, the ISM said the prices index slid to 60.5 in June from 63.5 in May, suggesting a slowdown in the pace of price growth.
The ISM is scheduled to release a separate report on activity in the service sector in the month of June next Wednesday.
by RTT Staff Writer
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