Man­u­fac­tur­ing in­dex up nearly 3 points

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

WASH­ING­TON — U.S. fac­to­ries ex­panded at a ro­bust pace in June, a likely sign of strength for the U.S. econ­omy as new or­ders, pro­duc­tion and em­ploy­ment each im­proved.

The In­sti­tute for Sup­ply Man­age­ment said Mon­day that its man­u­fac­tur­ing in­dex rose to 57.8 last month from 54.9 in May. Any­thing above 50 sig­nals that fac­tory ac­tiv­ity is in­creas­ing. The mea­sure now stands at its high­est level since Au­gust 2014, point­ing to solid eco­nomic growth.

Ian Shep­herd­son, chief econ­o­mist at Pan­theon Macroe­co­nomics, de­scribed the re­port as “very strong” and said it sug­gests that the econ­omy is healthy enough for the Fed­eral Re­serve to con­tinue rais­ing in­ter­est rates.

“This re­port will come as some­thing of a jolt to in­vestors com­fort­able with the idea that the econ­omy has slowed to the point where the Fed need take no fur­ther ac­tion,” Shep­herd­son said.

Fif­teen of 18 man­u­fac­tur­ing in­dus­tries sur­veyed by the in­sti­tute posted growth in June, in­clud­ing the fur­ni­ture, ma­chin­ery, fab­ri­cated me­tals and petroleum and coal sec­tors. One trans­porta­tion equip­ment firm sur­veyed for the re­port said “de­mand is up 5-7 per­cent.” A chem­i­cal com­pany said its busi­ness glob­ally “con­tin­ues to show im­prove­ment.”

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