U.S. manufacturing unexpectedly rose in January to the highest level since May 2004, according to the Institute for Supply Management.
The monthly ISM manufacturing index surged to 60.8 in January from a level of 58.5 in December. Index readings below 50 signal a slowing economy; those above 50 suggest expansion. Economists predicted the index would slip to 58.0.
“This is a very encouraging report,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight. “Manufacturing industries have accelerated for six months in a row, with recent strength in both domestic and export orders leading to a massive jump in order backlogs. Indeed, production and employment likely will have to be ramped up further in February for manufacturing industries to catch up with the recent strength in orders, a good portion of which appears to be unexpected. ”