U.S. Manufacturing Grew Less Than Expected In March
An index of U.S. manufacturing grew at a slower pace in March than in February, with the inflation component showing a jump and employment contracting, according to a survey published on Monday.
The Institute for Supply Management said its index of national factory activity eased to 50.9 from 52.3 in February.
Recent ISM Index Reports
|2006 - Oct||51.5||- 1.2|
|2006 - Nov||49.9||- 1.6|
|2006 - Dec||51.4||+ 1.5|
|2007 - Jan||49.3||- 2.1|
|2007 - Feb||52.3||+ 3.0|
|2007 - Mar||50.9||- 1.4|
The median forecast of economists polled by Reuters was for slightly less of a slip, to 51.1. A reading above 50 indicates growth in the sector.
U.S. stocks slipped into negative territory after the weaker-than-expected data, while bond prices rose slightly.
"I have to characterize this as a very soft report as a whole, said Richard DeKaser, chief economist at National City Corp. in Cleveland, adding "the verdict here is not very good, but we still have modest expansion."
The prices paid index, which measures inflationary pressures in the manufacturing sector, climbed to 65.5 in March, its highest since August, from 59.0 in February.
New orders, a gauge of future growth, eased to 51.6 from 54.9, while the employment index fell to 48.7 from 51.1.
The dip below 50 in the employment component had some investors questioning whether Friday's reading on U.S. March non-farm payrolls will be all that strong.
"The employment (gauge) is not favorable for the payroll report later this week," DeKaser said.
Analysts think about 120,000 jobs were created last month, up from 97,000 in February.