US manufacturing sector grows for the first time in 1-1/2 years

U.S. manufacturing grew for the first time in 1-1/2 years in March as production rebounded sharply and new orders increased, but employment at factories remained subdued and prices for inputs pushed higher.

The Institute for Supply Management (ISM) said on Monday that its manufacturing PMI increased to 50.3 last month, the highest and first reading above 50 since September 2022, from 47.8 in February.

The rebound ended 16 straight months of contraction in manufacturing, which accounts for 10.4% of the economy. That was the longest such stretch since the period from August 2000 to January 2002.

A PMI reading above 50 indicates growth in the manufacturing sector. The ISM and other factory surveys had grossly overstated the weakness in manufacturing, which has been constrained by higher borrowing costs. Government data on Thursday showed manufacturing output rising at a 0.9% annualized rate in the fourth quarter. It grew 1.6% in 2023 compared to 0.8% in 2022.


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