US manufacturers expanded in June but more slowly


WASHINGTON (AP) — U.S. manufacturing grew in June for the 13th straight month. But the pace of the
expansion slowed from May.
The Institute for Supply Management said Tuesday that its manufacturing index dipped to 55.3 in June from
55.4 in May. Any reading higher than 50 signals that manufacturing is growing.
The trade group of purchasing managers said that orders rose at a faster pace last month compared with
May. But growth in production and exports slowed. A measure of employment shows that factories added
jobs for the 12th straight month; the pace of hiring last month was the same as in May.
Fifteen of 18 manufacturing industries grew in June, led by furniture makers and mineral producers.
Textile, chemical, and plastics and rubber manufacturing contracted in June.
Last week, the Commerce Department reported that orders for U.S. durable goods fell 1 percent in May,
dragged down by a drop in demand for military equipment. Excluding defense-related goods, orders rose.
And in a good sign for future business investment, orders for core capital goods rose 0.7 percent.
Increased spending by businesses would give the economy some momentum after it got off to a bad start
this year: The U.S. economy shrank at a 2.9 percent annual rate from January through March. But
economists blame the first-quarter drop on an unusually bitter winter and a sharp reduction in
businesses’ inventories. They expect economic growth to rebound to an annual pace of 3 percent the
second half of 2014.
The job market has been steadily improving. Employers added 200,000 jobs in May for the fourth straight
month, longest such stretch since 1999. Factories added 10,000 jobs in May.
In a research note, analysts at Stone McCarthy Research Associates said the ISM survey’s employment
measure is “consistent with further gains in manufacturing payrolls.” They forecast that factories added
another 10,000 jobs in June.
The government’s employment report for June comes out Thursday.
Economists have been worried about the fallout from slower economic growth in China. But a survey out
Tuesday showed that Chinese manufacturing grew in June for the first time in six months, though the
expansion was weak. HSBC Corp. said Tuesday its purchasing managers index for China rose to 50.7 from
May’s 49.4 on a 100-point scale. Numbers above 50 signal growth.

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