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

Index Level
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.

Contact U.S. News


    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Don't Miss

U.S. Video

  • This video is 90 seconds of cyber attacks happening around the globe, courtesy of Norse Norse is a technology company that bills itself as the "global leader in live attack intelligence." The company offers continuously "updated and unique Internet and darknet intel that helps organizations detect and block attacks that other systems miss."

  • Is this breakout story on your radar? Mad Money host Jim Cramer is about to put it there.

  • Paul Hickey, Bespoke Investment co-founder, discusses the huge divergence between the S&P 500 and the energy sector.