Ahead of the Bell: US Manufacturing Survey
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The Institute for Supply Management reports on U.S. manufacturing production, orders and other activity in June. The ISM, a trade group of purchasing managers, will release its manufacturing index Tuesday at 10 a.m. Eastern time.
STEADY GAINS: Economists forecast that the index rose for the fifth straight month in June — to 55.8 from 55.4 in May, according to a survey by FactSet. Any reading above 50 signals growth.
CONFUSION: Last month, the ISM twice issued erroneous figures for its manufacturing index in May before getting it right the third time. In the end, the index showed that manufacturing expanded at a healthy pace in May. Production and orders rose to the highest level since December. A measure of employment showed that factories added jobs in May, though at a slower pace than in April.
Last week, the Commerce Department reported that orders for U.S. durable goods fell 1 percent in May, dragged down by a drop in demand for military equipment. Excluding defense-related goods, orders rose. And in a good sign for future business investment, orders for core capital goods rose 0.7 percent. Increased spending by businesses would give the economy some momentum after it got off to a bad start this year: The U.S. economy shrank at a 2.9 percent annual rate from January through March. But economists blame the first-quarter drop on an unusually bitter winter and a sharp reduction in businesses' inventories. They expect economic growth to rebound to an annual pace of 3 percent the second half of 2014.
The job market has been steadily improving. Employers added 200,000 jobs in May for the fourth straight month, longest such stretch since 1999. Factories added 10,000 jobs in May.
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