U.S. manufacturing activity expands in January- ISM

A report from the Institute for Supply Management (ISM) showed on Monday the U.S. manufacturing sector's activity expands in January 2020.

The ISM's index of manufacturing activity came in at 50.9 percent last month, up 3.1 percentage points from the December 2019 reading of 47.8 percent (revised from 47.2). That marked the first growth in factory activity since July 2019 and beat economists' forecast for a 48.5 percent reading.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

According to the report, the New Orders Index stood at 52.0 percent, a surge of 4.4 percentage point from the December reading, while the Production Index registered 54.3 percent, up 9.5 percentage points compared to the seasonally adjusted December reading, the Employment Index recorded 6.6 percent, a 1.4-percentage point increase from the seasonally adjusted December reading and the Backlog of Orders Index posted 45.7 percent, up 2.4 percentage points compared to the December reading. At the same time, the Supplier Deliveries Index registered 52.9 percent, a 1.7-percentage point drop from the December reading, and the Inventories Index recorded 48.8 percent, a decrease of 0.4 percentage point from the seasonally adjusted December reading. Elsewhere, the Prices Index showed a 1.6-percentage point climb to 53.3 percent in January.

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, "The past relationship between the PMI and the overall economy indicates that the PMI for January (50.9 percent) corresponds to a 2.4-percent increase in real gross domestic product (GDP) on an annualized basis."