New data on manufacturing released this morning helps bolster the case that the economy is firming after several months of weakness earlier in the year.
The ISM manufacturing survey, which polls manufacturers about various aspects of their businesses, increased to 51.3 in May, from 50.8 in April. It’s a good sign for the struggling manufacturing sector, said Bob Hughes, senior research fellow at the American Institute for Economic Research.
The ISM manufacturing index has now been above the neutral level of 50 for three months in a row. The new orders index was essentially unchanged and held at a pretty favorable level. The current production index was lower, but still at a high enough level to be encouraging, Hughes said. Employment in the manufacturing sector remained just below neutral, suggesting continued weakness in this area, Hughes said.
Meanwhile, in a separate report from the Commerce Department, Americans spent 1.8 percent less on construction in April than they did in March. Year-over-year, however, construction spending was up by 4.5 percent, and private construction was up 5.7 percent, Hughes noted.
“It all points to a moderate amount of improvement,” Hughes said. “Activity is picking up a bit from weakness earlier in the year.”
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