U.S. Manufacturing Index Indicates Growth For First Time In Six Months
After reporting contractions in U.S. manufacturing activity for five straight months, the Institute for Supply Management released a report on Friday showing that activity in the sector expanded at a faster than expected rate in March.
The ISM said its purchasing managers index climbed to 51.8 in March from 49.5 in February, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 50.5.
"Manufacturing registered growth in March for the first time since August 2015, as 12 of our 18 industries reported sector growth, and 13 of our 18 industries reported an increase in new orders in March," said Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee.
The bigger than expected increase by the headline index was partly due to a substantial acceleration in the rate of growth in new orders, as the new orders index jumped to 58.3 in March from 51.5 in February.
The report also showed a faster rate of growth in production, with the production index rising to 55.3 in March from 52.8 in February.
Meanwhile, the ISM said the employment index edged down to 48.1 in March from 48.5 in the previous month, indicating a slightly faster rate of contraction in employment in the manufacturing sector.
The Labor Department's monthly jobs report released earlier in the day showed that the manufacturing sector lost 29,000 jobs in March after the loss of 18,000 jobs in February.
On the inflation front, the prices index surged up to 51.5 in March from 38.5 in February, indicating higher raw materials prices for the first time since October of 2014.
The ISM is scheduled to release a separate report next Tuesday on activity in the service sector in the month of March.
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