U.S. factory activity picks up after five-month lull
WASHINGTON - U.S. manufacturing growth accelerated in May for the first time in six months, propelled by more new orders and an increase in hiring.
The Institute for Supply Management, a trade group of purchasing managers, says that its manufacturing index rose to 52.8 last month, from 51.5 in April. That's the highest reading since February. Any reading above 50 signals expansion.
Analysts had varying views of the data.
The modest improvement puts manufacturing "at a level that historically has been consistent with GDP growth of around 2 percent," offered Paul Ashworth, chief U.S. economist at Capital Economics. "Accordingly, even though the stronger dollar is holding back the export-focused factory sector, this is not a recovery killer, particularly not when the other sectors of the economy are performing much more strongly."
"Hard to take seriously, given seasonal adjustment problems; likely will rise further," Ian Shepherdson, chief economist, Pantheon Macroeconomics, wrote in a note.
While slightly better than expected, the index "is basically even with the six-month average of 52.9 and remains below the 12-month average of 54.9," emailed Peter Boockvar, chief market analyst at the Lindsey Group.
A measure of production fell, but it remained above 50. A gauge of new orders rose to the highest level since December, a sign production should pick up in the months ahead.
And a measure of employment jumped to 51.7, after falling below 50 in April. That means manufacturers added jobs last month.