U.S. Factories Expanded in May

Revised report shows manufacturing strength.

June 03, 2014

NEW YORK – American factories gained momentum as the second quarter unfolded, a pocket of a strength amid a slow and uneven global recovery, reports an article in the Wall Street Journal. This growth may be viewed as a bellwether for the positive growth in other sectors of the domestic economy.

Manufacturing activity accelerated in May to 55.4 from 54.9 in April, the fourth consecutive month of improvement, according to the Institute for Supply Management's manufacturing index Monday. (Readings above 50 indicate expansion.)

The final 55.4 reading was preceded by two false starts on Monday, as the ISM grappled with calculation missteps, initially reporting a number below many economists' expectations.

The May index confirms the view of a spring snapback in the U.S. economy after the harsh winter contributed to a 1% contraction in real gross domestic product for the first quarter. Gauges within the revised report showed improvement in areas such as new orders and production but a deceleration in employment.

The ISM report reflected demand and output in the United States both speeding up in May. The production index jumped to 61.0 last month from 55.7 in April. That was the highest reading since December. The new-orders index also rose to a five-month high of 56.9 from 55.1 in April.

Indeed, despite a fitful recovery, many American manufacturers say business is growing. Around the world, manufacturing improved slightly in China and moderated in Europe during the past month.

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