WASHINGTON (Bloomberg)—Manufacturing expanded in May at the fastest pace this year as American assembly-line workers responded to increased orders by cranking up production.
The Institute for Supply Management’s factory index rose to 55.4 from the prior month’s 54.9. Readings above 50 indicate expansion. The release of the data, watched closely by financial markets as a gauge of the economy’s strength, was anything but smooth. The Tempe, Ariz.-based group had to amend its figures twice due to calculation errors.
Factories are helping spur a second-quarter economic rebound after a slowdown in inventory-building led to the first contraction in three years. Sustained demand from consumers, combined with corporate orders for machinery and equipment, are helping propel sales at companies such as Cisco Systems Inc.
“The case for better growth is very good,” said Ethan Harris, co-head of global economics research at Bank of America Corp. in New York, who projected a reading of 55.5. “We’re kind of at the point where the economy should really have a chance to pick up speed.”
The median forecast of economists surveyed by Bloomberg called for 55.5. Estimates from 82 economists in the Bloomberg survey ranged from 54 to 57. Manufacturing accounts for about 12 percent of the economy.
Manufacturing in May was boosted by the fastest pace of orders and output in five months.
The index of production increased to 61 from 55.7 the prior month, while the new orders measure advanced to 56.9 from 55.1.
Manufacturing data shows U.S. emerging from slump - The Japan News
The Institute for Supply Management’s factory index rose to 55.4 from the prior month’s 54.9. Readings above 50 indicate expansion. The release of the data, watched closely by financial markets as a gauge of the economy’s strength, was anything but smooth. The Tempe, Ariz.-based group had to amend its figures twice due to calculation errors.
Factories are helping spur a second-quarter economic rebound after a slowdown in inventory-building led to the first contraction in three years. Sustained demand from consumers, combined with corporate orders for machinery and equipment, are helping propel sales at companies such as Cisco Systems Inc.
“The case for better growth is very good,” said Ethan Harris, co-head of global economics research at Bank of America Corp. in New York, who projected a reading of 55.5. “We’re kind of at the point where the economy should really have a chance to pick up speed.”
The median forecast of economists surveyed by Bloomberg called for 55.5. Estimates from 82 economists in the Bloomberg survey ranged from 54 to 57. Manufacturing accounts for about 12 percent of the economy.
Manufacturing in May was boosted by the fastest pace of orders and output in five months.
The index of production increased to 61 from 55.7 the prior month, while the new orders measure advanced to 56.9 from 55.1.
Manufacturing data shows U.S. emerging from slump - The Japan News
