U.S. Manufacturing Sector Expanding

According to the Financial Times, U.S. manufacturing activity expanded last month at the fastest rate since 2004 on the strength of robust new orders and production, offering hope that the sector will add momentum to the economic recovery.

The Institute of Supply Management said its manufacturing index increased from a revised 58.5% in December to 60.8% in January. That was a sharper rise than Wall Street analysts expected and was the best reading since May 2004. (Readings greater than 50% signal expansion.)

Manufacturing executives said that the weak U.S. dollar was driving up materials costs and having a negative effect on the purchase of components from overseas. Although the executives said they were becoming optimistic about the U.S. economy and saw “unexpected strength” in foreign markets, a reluctance to hire is lingering. ◆