The business activity in the US manufacturing sector expanded in January, with the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) improving to 52.6 from 47.9 in December. This reading came in better than the market expectation of 48.5.
Other details of the publication showed that the Employment Index of the PMI survey rose to 48.1 from 44.9 in this period, while the New Orders Index jumped to 57.1 from 47.7. Finally, the Prices Paid Index, also known as the inflation component, edged higher to 59 from 58.5.
Assessing the findings of the survey, “in January, US manufacturing activity returned to expansion territory, with improvements in all five subindexes that make up the PMI, though the Employment and Inventories indexes still remain in contraction,” said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.
“Although these are positive signs for the start of the year, they are tempered by commentary citing that January is a reorder month after the holidays, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues,” Spence added.
Market reaction to US ISM Manufacturing PMI data
The US Dollar (USD) Index gains traction in the American session and was last seen rising 0.35% on the day at 97.50.