US manufacturing grows for 10th month
- American manufacturers boosted activity for the 10th straight
month in March and factory jobs growth accelerated, cementing
a key pillar in the recovery, a survey showed.
The Institute for Supply Management (ISM) purchasing managers'
index, based on a survey of supply executives, rose 1.1 point
from February to 62.5 points in March.
It was the 10th month in a row above 50 points, indicating expansion
in manufacturing activity.
"It looks like the factory sector is really ramping up and
is now in the midst of a strong, broad-based recovery," Wachovia
senior economist Mark Vitner said.
The survey showed factory jobs growth picked up, with the employment
index rising 0.7 point to 57.0. It was the fifth month of expanding
manufacturing employment in the survey following a 37-month contraction.
Official figures show manufacturers have shed 2.8 million jobs
since January 2001.
Democratic presidential hopeful John Kerry (news - web sites)
has seized on the jobs drought as a weapon in his campaign against
President George W. Bush (news - web sites) ahead of November
US employment data for March, to be released Friday, could swing
the outlook for the election.
Private economists on average predict the government figures will
show the economy churned out 123,000 jobs in March, after a paltry
gain of 21,000 in February.
Some economists even tip a gain in manufacturing employment in
the month, after a 43-month stretch of net factory layoffs.
Vitner forecast a surge of 225,000 jobs in March, putting in place
the last piece of the economic recovery. He tipped US economic
growth of nearly five percent in 2004.
A weekly reading of the numbers of recently unemployed was only
The number of people lodging new claims for unemployment benefits
fell 3,000 to a seasonally adjusted 342,000 in the week ended
March 27, after a gain of 12,000 the previous week, the Labor
Department (news - web sites) said.
Among other key findings in the ISM survey:
-- Factory output accelerated, with the production index rising
1.6 point to 65.5.
-- New orders grew, albeit at a slower pace, with the index dipping
0.7 point to 65.7. The backlog of orders expanded at a faster
pace, with the index up 1.5 points to 63.5. Export orders picked
up speed, with index rising 7.1 points to 62.0.
-- Prices paid by manufacturers climbed faster, with the index
surging to 86.0 from 81.5.
Investors cheered the data. The Dow Jones Industrial
Average gained 55.63 points or 0.54 percent to 10,413.33 in mid-morning
Manufacturers Alliance president and chief executive
Thomas Duesterberg said the ISM survey confirmed strong momentum
in the sector.
"We expect to see continued growth for the
remainder of 2004," Duesterberg said.
"Although rising input costs are squeezing
profit margins, today's report also confirms that firms are hiring
production workers to meet growing demand," he said.
The ISM survey found some commodities in short supply:
aluminum, steel, galvanized steel, stainless steel, cold rolled
steel, propylene, electronic components and dynamic random access
memory (DRAM) microchips.
A separate report showed wholesale prices for finished
goods barely edged higher in February despite a surge in the cost
of some materials such as steel.
Producer prices crawled 0.1 percent higher in February,
after a 0.6-percent jump in January, the Labor Department said.
Wholesale prices were up 2.1 percent over the year.
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