US Manufacturing Sector Expands at Fastest Pace in more than 4 years, Markit Confirms
The US manufacturing industry continued to build momentum in June, as output and new orders expanded at the fastest pace in more than four years, Markit confirmed today in its final PMI estimate.
Markit Group’s gauge of US manufacturing activity for June rose from 56.4 for 57.3. A reading above 50 is a general sign of expansion in manufacturing activity, whereas a reading below that level signifies contraction.
The headline PMI reading was revised slightly from the flash estimate of 57.5.
US manufacturers closed out the second quarter on a strong footing, as business conditions improved markedly in June. The gains were led by the fastest rise in output and new orders since April 2010, which continued to spur job creation at a strong pace.
The headline PMI indicator was the highest since May 2010, a sign overall business conditions in the manufacturing sector improved strongly. The average PMI reading in the second quarter was 56.4, the strongest in four years.
Output growth accelerated for the third consecutive month, driven by a sharp rise in new business volumes. The level of new business remained elevated despite new export orders falling to a five-month low. Manufacturers continued to cite improved domestic demand as a main catalyst for stronger business activity.
Job creation reached a four-month high in June, signaling at another strong month of overall job gains for the US economy. US employers added 217,000 nonfarm payrolls in May, following a gain of 282,000 the previous month that was the strongest in two years.
The Labor Department on Thursday is expected to show the US economy added more than 200,000 nonfarm payrolls in June.
Average hourly earnings are forecast to have increased 0.2 percent in June, following a similar gain the previous month.
“Business was booming at US goods producers in June,” said Markit chief economist Chris Williamson in a press release. “Factory output, order books and payroll numbers rose at some of the fastest rates we’ve seen since the recession, rounding off the best quarter for four years in terms of manufacturing expansion.”
Williamson added the US economy was on pace to accelerate more than 3 percent annually in the second quarter, following the biggest contraction since the start of 2009.
The US economy contracted 2.9 percent annually in the first three months of 2014, as inclement weather weighed on personal consumption expenditures.
Most economists have pegged second quarter GDP growth at between 3 percent and 4 percent.
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