Manufacturing shows no slowdown
August 1, 2005
A report from the Institute of Supply Management shows that manufacturing in the United States grew more quickly than had been expected in July. The ISM’s index of national factory activity went up from 53.8 in June to 56.6 in July, while the July level had been predicted to be at 54.5.
The increase helped curb concerns that an industrial sector slowdown earlier in the year could be extending into the third quarter. Further, the ISM’s prices paid index fell fro 50.5 in June to 48.5 in July, the first time in 40 months that this indicator had decreased. The decrease in prices came in spite of higher gasoline and oil prices.
Also up were the employment index and the new orders index. The employment index rose from 49.9 in June to 53.2 in July, possibly foreshadowing higher non-farm payrolls. The new orders index, which is a measure of future growth, was up from 57.2 in June to 60. 6 in July. Analysts said that July’s numbers are very good indicators that the economy continues to be strong, and that they give further impetus to expectations of more interest rate hikes by the Federal Reserve this month and in the months to come.