The nation's manufacturing sector expanded at a modest clip in January, recovering from the contraction seen in December, an industry group survey showed today.
After slipping to its lowest level in almost five years, the Institute for Supply Management said that its manufacturing index rose last month to a reading of 50.7, up from a revised reading of 48.4 in the previous month.
A reading above 50 indicates growth, and below that level indicates contraction.
The Tempe, Ariz.-based private research group's results were much better than the 47 expected by analysts polled by Thomson/IFR Markets.
The results indicated that Federal Reserve rate cuts intended at boosting the economy might be doing their job, but that they might also be exacerbating inflation. The report's prices paid index grew at a fast clip, rising to a reading of 76 in January from 68 in December.
Strong industries included apparel, energy, food, appliances, primary metals, machinery and chemicals.
Industries that saw contraction were nonmetallic mineral products, printing, wood products, furniture, fabricated metals, plastic and rubber, transportation equipment, and computer and electronic products.