— Andrew Hunter, Capital Economics.
US manufacturing activity rose more than expected last month, official figures showed on Monday. The Institute for Supply Management reported its Purchasing Managers' Index for the manufacturing sector increased to 57.8 in June, up from 54.9 registered in the preceding month. That marked the strongest reading since August 2014, reflecting improvements in economic conditions both within the country and abroad. The report showed that 15 of 18 sectors tracked by the ISM expanded in June. Moreover, the New Orders Index jumped to 63.5 last month from 59.5 in May, while production surged to 62.4. Furthermore, the Prices Paid Index fell to this year's lowest level of 55.0, though, the reading above 50 point level still indicated higher prices of raw materials. Overall, the ISM survey suggested that the US economy would show a sharp rebound for the June quarter. After the release, the Atlanta Fed raised its second-quarter GDP growth forecast to a 3.0% annual rate, up from 2.7% expected earlier. In addition, experts suggest that higher overseas demand is likely to support rising confidence in the global economic outlook.
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