US MANUFACTURING GROWTH SURPRISES, BUT THE JOBS STATISTICS ARE SUBDUED

US MANUFACTURING grew for the first time in 1½ years in March as production rebounded sharply and new orders increased, but employment at factories remained subdued and prices for inputs pushed higher. The Institute for Supply Management (ISM) said yesterday, its manufacturing PMI increased to 50.3 points last month, the highest and first reading above 50 points since September 2022, from 47.8 points in February. The rebound ended 16 straight months of contraction in manufacturing, which accounts for 10.4% of the economy. That was the longest such stretch since the period from August 2000, to January 2002. A PMI reading above 50 points indicates growth in the manufacturing sector. The ISM and other factory surveys had grossly overstated the weakness in manufacturing, which has been constrained by higher borrowing costs. Government data on Thursday showed manufacturing output rising at a 0.9% annualised rate in the fourth quarter. It grew 1.6% in 2023 compared to 0.8% in 2022. Economists polled by Reuters had forecast the PMI rising to 48.5 points. Though consumer spending has shifted to services, demand for goods remains supported. The ISM survey's forward-looking new orders subindex increased to 51.4 points last month from 49.2 points in February. Output at factories rebounded, with the production subindex surging to 54.6 points from 48.4 points in the prior month. There was no sign of supply chain constraints from attacks on international shipping in the Red Sea by Yemen's Houthi militants. The survey's measure of supplier deliveries slipped to 49.9 points from 50.1 points. | Reuters