HotmailManufacturing boosts hopes of recession’s end
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The 44.8 reading for the ISM manufacturing index in June was up from 42.8 in May and marked the highest point for the index since August. Any reading below 50 is viewed as a signal of contraction in manufacturing.
But economists were heartened by the upward trend in recent months: This is the second straight month that the index has been above 41.2. ISM analysts said this was consistent with an expansion for the overall economy even though manufacturing is still shrinking.
"A slow recovery for manufacturing is forming," said Norbert Ore, chair of the ISM's manufacturing business survey committee.
Other reports were encouraging for manufacturing in other countries. Two reports from China, the world's third-largest economy, showed small gains in surveys of manufacturers. Elsewhere, the purchasing managers index from the 16-nation euro zone showed a slower pace of decline in June. And the equivalent index in Britain hit a 15-month high of 47.
British manufacturing output rose for the first time since March 2008. Big Japanese manufacturers reported being slightly more optimistic about business conditions but cut capital spending sharply.
The ISM survey of U.S. activity hasn't noted growth in manufacturing since January 2008. The index includes new orders, production, employment, inventories, prices, and export and import orders. It is based on a survey of ISM members from 18 industries.
The third quarter started on a positive note on Wall Street as investors hoped an economic recovery was beginning to take shape. The Dow Jones industrial average added more than 57 points 8,504.06, and broader indexes also gained.
The pace of manufacturing layoffs may have slowed since winter but it has not stopped.
Farm machinery company Deere & Co. said this week that 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer. That's four times as many as the company expected when it announced the program in April.
In June, Cessna Aircraft Co., which makes corporate jets, said it would cut 1,300 jobs by this summer on top of 6,900 earlier layoffs.
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