WASHINGTON (9/3/14)--U.S. manufacturing outperformed expectations in August, according to the Institute for Supply Management's (ISM) monthly index, which rose to 59 from 57.1 for the month.
With both the production and new-order subcomponents increasing in August, the index jumped for the second straight month and reached its highest mark since 2011 (Economy.com Sept. 2).
Further, 17 of 18 industries tracked by ISM's gauge witnessed expansion, with only clothing manufacturers experiencing weaker business activity month-over-month.
"What we're seeing is just so broad-based," Bradley Holcomb, ISM manufacturing survey committee chair, told MarketWatch (Sept. 2).
New orders recorded their strongest numbers since 2004, climbing to 66.7 in August from 63.4, while production increased to its highest level in four years at 64.5 from 61.2.
The employment gauge edged down but remains at a strong 58.1 (MarketWatch).
Part of the broad gains in the index, however, are likely due to the inventory subcomponent, which historically rises in August. It increased to 42 from 38.5 in July.
But analysts still see the recent data as a positive sign for the economy.
"The August ISM manufacturing index is evidence that the economy continues to grow above trend," said Ryan Sweet, Moody's analyst (Economy.com). "The three expected pillars of growth (including business investment and construction spending) in the second half are doing well, save for consumer spending."
Consumer spending slipped in July, according to the Bureau of Economic Analysis, with real spending declining 0.2% for the month (News Now Sept. 2).