U.S. Manufacturing Index Reaches Highest Level This Year

(RTTNews) - Partly reflecting a faster rate of job growth in the sector, the Institute for Supply Management released a report on Thursday showing that its index of U.S. manufacturing activity rose by more than expected in the month of April.

The ISM said its purchasing managers index climbed to 54.9 in April from 53.7 in March, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge up to a reading of 54.3.

With the increase, the index climbed further off the eight-month low set in January and reached its highest level since December of last year.

Jay Morelock, an economist at FTN Financial, said, "It seems manufacturing activity is gradually crawling back from a depressed December - February, climbing in every month so far this year, albeit at a slow pace."

The bigger than expected increase by the headline index was partly due to faster job growth in the manufacturing sector, with the employment index jumping to 54.7 in April from 51.1 in March.

The report also showed a notable increase by the new export orders index, which rose to 57.0 in April from 55.5 in the previous month.

Meanwhile, the report also showed that the new orders index was unchanged from the previous month at 55.1, while the production index edged down to 55.7 from 55.9.

Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel generally remain positive; however, some expressed concern about international economic and political issues potentially impacting demand."

On the inflation front, the prices index dropped to 56.5 in April from 59.0 in March, indicating a slower rate of price growth.

Next Monday, the ISM is scheduled to release a separate report on activity in the service sector in the month of April.