Activity in the U.S. manufacturing sector unexpectedly grew at a slightly slower rate in the month of June, according to a report released by the Institute for Supply Management on Tuesday.
The ISM said its purchasing managers index edged down to 55.3 in June from 55.4 in May, although a reading above 50 still indicates growth in the manufacturing sector.
The modest decrease came as a surprise to economists, who had expected the index to inch up to a reading of 55.8.
Despite the modest decrease, Rob Carnell, chief international economist at ING, noted that the index continues to point to robust growth.
"Such a headline manufacturing ISM figure is consistent with GDP growth of 3.5%, and in all likelihood, the U.S. will grow a good deal faster than that in 2Q14 following the execrable 1Q14 GDP result," Carnell said.
The modest decrease by the headline index was partly due to a slowdown in production growth, as the production index dipped to 60.0 in June from 61.0 in May.
On the other hand, growth in new orders accelerated compared to the previous month, with the new orders index climbing to 58.9 in June from 56.9 in May.
The
report also showed that the employment index came in unchanged at 52.8,
indicating the twelfth consecutive month of job growth in the
manufacturing sector.
While recent inflation data has pointed to prices rising at a faster rate, the ISM said its prices index fell to 58.0 in June from 60.0 in May.
Thursday morning, the ISM is scheduled to release a separate report on activity in the service sector in the month of June.
Economists expect the index of activity in the service sector to edge down to 56.2 in June after climbing to 56.3 in May.
