In a surprise, the U.S. manufacturing sector increased production and expanded in June.
The Institute for Supply Management Manufacturing Index rose to 50.2 in June from 49.6 in May, the Institute announced Tuesday. It was the first increase for the index since January. Readings above 50 indicate economic growth; readings below 50, economic contraction.
Economists surveyed by Bloomberg News had expected the index to drop to 48.7 in June 2008.
Economist David H. Wang Tuesday cautioned against taking a too positive interpretation of the June ISM manufacturing data. "We have to keep in mind that this is just one month and the trend had indicated contraction for five months," Wang said. "Also, we are barely above 50, and the index could easily drop below 50 in the next month, which would be consistent with a continuing contraction, so evaluate the June results in that context."
Nine industries reported growth in June, the ISM said: printing & related support activities; paper products; computer & electronic products; petroleum & coal products; food, beverage & tobacco products; chemical products; primary metals; furniture & related products; and fabricated metal products.
Eight industries reported a contraction in June: wood products; electrical equipment, appliances & components; transportation equipment; machinery; nonmetallic mineral products; apparel, leather & allied products; and plastics & rubber products.
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