U.S. factories expanded more than forecast in January and near the fastest pace in more than 13 years, indicating manufacturing was still powering ahead at the start of 2018, Institute for Supply Management data showed Feb. 1.
Highlights of ISM Manufacturing for January
• Factory index was little changed at 59.1 (estimated 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.
The January reading, which exceeded the 57.4 average for 2017, shows manufacturing is benefiting from solid consumer spending and business investment.
What’s more, a measure of exports advanced to an almost seven-year high, underscoring improving overseas markets.
The pickup in manufacturing is starting to generate inflation pressures as factories demand more raw materials including crude oil. The ISM’s measure of prices paid increased to the highest level since May 2011.
In a sign factories are challenged by elevated demand, the ISM’s measure of supplier deliveries climbed to a three-month high and its backlogs index rose to the highest level since September.
The ISM report comes a day before the Labor Department’s January jobs report, which is projected to show an increase in factory payrolls helped to boost overall employment.
• 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