By Sho Chandra / February 02, 2018 / www.bloomberg.com /
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U.S. factories expanded more than forecastin January and near the fastest pace in more than 13 years,indicating manufacturing was still powering ahead at the startof 2018, Institute for Supply Management data showed Thursday.
Highlights of ISM Manufacturing (January)
Factory index was little changed at 59.1 (est. 58.6) from 59.3 in Dec.; readings above 50 indicate expansion
Gauge remains close to Sept. reading of 60.2, which was the highest since June 2004
Measure of new orders cooled to 65.4 from an almost 14-year high of 67.4
Employment gauge fell to an eight-month low of 54.2 from 58.1
Key Takeaways
The January reading, which exceeded the 57.4 average for 2017,shows manufacturing is benefiting from solid consumer spendingand business investment. What's more, a measure of exportsadvanced to an almost seven-year high, underscoring improvingoverseas markets.
The pickup in manufacturing is starting to generate inflationpressures as factories demand more raw materials including crudeoil. The ISM's measure of prices paid increased to the highestlevel since May 2011.
In a sign factories are challenged by elevated demand, the ISM'smeasure of supplier deliveries climbed to a three-month high andits backlogs index rose to the highest level since September.
The ISM report comes a day before the Labor Department’s Januaryjobs report, which is projected to show an increase in factorypayrolls helped to boost overall employment.
Other Details
ISM measure of prices paid jumped to 72.7 from 68.3
Index of factory inventories rose to 52.3, indicating stockpiles were expanding, from 48.5
Gauge of production fell to 64.5 from 65.2
Export orders measure advanced to 59.8, the strongest since April 2011, from 57.6
Supplier deliveries gauge rose to 59.1, indicating longer lead times, from 57.2; index of backlogs climbed to 56.2 from 54.9
— With assistance by Chris Middleton
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