US manufacturing expands in June at fastest rate in 4 years: Markit

An employee grinds steel components on the fabrication area floor at the Ellicott Dredges manufacturing facility in Baltimore, Maryland.
Andrew Harrer | Bloomberg | Getty Images

The U.S. manufacturing sector expanded more strongly than expected in June, with the rate of growth and key subindexes advancing to their highest levels in more than four years, an industry report showed on Monday.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index rose to 57.5 in June, above economist expectations for 56.5 and the highest reading since May 2010. In May, the final read for the index was 56.4.

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A reading above 50 signals expansion in economic activity.

The output subindex jumped to 61 from 59.6 while a read on new orders rose to 61.7 from May's final read of 58.8. Both marked the highest level for the indexes since April 2010.

The data adds "to indications that the U.S. economy rebounded strongly in the second quarter from the weather-related weakness seen at the start of the year," said Chris Williamson, chief economist at Markit.

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Williamson added that the data suggests U.S. gross domestic product "should be set to rise by at least 3 percent after the 1 percent decline in the first quarter."

A read on employment was essentially unchanged from the previous month.

Markit's "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed.

By Reuters