WASHINGTON (9/4/13)--U.S. manufacturing expanded in August at it quickest pace in more than two years, heightening expectations for more rapid overall growth in the U.S. economy in the second half of 2013, according to the Institute for Supply Management's (ISM) manufacturing index (The New York Times, The Wall Street Journal and Bloomberg.com Sept. 3).
The index rose to 55.7 in August from 55.4 in July, ISM said. A reading above 50 is a sign of expansion in the manufacturing sector. August's uptick was the third consecutive monthly expansion, and the index reading was the highest of the year.
Also, new orders recorded their best level in more than two years, with that sub-index surging to 63.2 from 58.3. However, the employment sub-index dipped to 53.3 from 54.5
Government-spending cuts and eroding global demand have hurt manufacturing this year, causing the sector to contract in May, the Times said.
However, substantial rises in activity in July and August are enhancing economists' outlooks that companies producing U.S. goods are gaining traction as the year goes on, the Times added.