U.S. manufacturing activity mounted an unexpected comeback in March.
The Institute for Supply Management (ISM) said its index of national factory activity climbed to 55.3 in March compared with the prior month’s reading of 54.2. Economists had been expected the index to remain flat after seriously declining in December and slowing again in February.
The improvement was broad. The new orders index, an important indicator of future activity, jumped to 57.4 from 55.5 in February. Production rose to 55.8 from 54.8. The prices paid index rose as well, indicating that manufacturers are paying more for materials–a positive sign given how many indicators of very low inflation and deflation have appeared in recent data.
The employment index soared to 57.5 from 52.3 in February. This positive development likely indicates that the March jobs numbers, which will be released Friday, will be significantly stronger than the very weak 20,000 payrolls number for February.
Any reading above 50 in the ISM index indicates expansion in the manufacturing sector.