US manufacturing ends 26-month contraction
US manufacturing activity expanded last month for the first time in more than two years on improving demand and production, according to survey data published Monday.
The Institute for Supply Management's (ISM) manufacturing index hit 50.9 percent last month, rising 1.7 percentage points from November to cross the 50-point mark separating expansion from contraction.
This was slightly above the median expectation of 50.0 in a survey of economists conducted by Dow Jones Newswires and The Wall Street Journal, and came in the same month Republican Donald Trump returned to the White House after his presidential election win in November.
"US manufacturing activity expanded in January after 26 consecutive months of contraction," survey chief Timothy Fiore said in a statement.
"Demand and production improved; and employment expanded. However, staff reductions continued with many companies, but at weaker rates," he added.
Fiore also noted that price growth was moderate, "indicating that further growth will put additional pressure on prices."
Eight manufacturing industries saw growth last month, including textile mills and petroleum and coal products, while eight reported contraction, including furniture and related products, and computer and electronic products.
"Buoyed by gains across various sub-components, the ISM Manufacturing Index broke above 50 for the first time since 2022," economists at Wells Fargo wrote in a note to clients.
"There was broad based strength in the ISM with four of the five components that make up the headline index higher at the start of the year," they added, noting that the new orders index rose three points to 55.1 marking its fifth consecutive monthly increase.
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