U.S. manufacturing activity picked up growth pace in June, indicating the economy might gain growth momentum in summer.
The manufacturing index, also known as the purchasing managers index (PMI), registered 57.8 in June, up from May's reading of 54.9, and the highest since August 2014, the Institute for Supply Management (ISM) said in a report on Monday. A reading above 50 indicates the sector is generally expanding, while a reading below that level indicates contraction.
The new orders index increased four points from the previous month to three-month high of 63.5, production index rose 5.3 points to 62.4, and the employment index also moved up 3.7 points to 57.2. Of the 18 manufacturing industries, only apparel, textile mills and primary metals recorded contraction in June.
Companies surveyed reported strong business and said that supplier deliveries and inventories are struggling to keep up with the production pace, according to the report.
Some Federal Reserve officials said recently that they expected the economy to rebound in the second quarter in view of the recent improved data.
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