"We just got off to a slower start than expected. The second half will be better"
-Maury Harris, the New York-based chief economist for UBS Securities LLC
Manufacturers in the world's largest economy followed the Eurozone's manufacturers' example and boosted activity in the sector in June, while a separate report showed that construction spending surged in May to the highest level in more than 4 years. The index of national factory activity last month rose to 50.9 up from 49.0 in May, beating analysts' expectations of 50.6 and moving back into a positive territory, which indicates expansion in the sector. At the same time, the measure of new orders rose to 51.9 from 48.8, while production rocketed to 53.4 compared with 48.6, pushing the overall manufacturing activity back from May's contraction, which was the first in six months.
Also Monday data showed that spending on residential housing increased in the last month of spring, touching the highest level since October 2008. The construction spending rose 0.5% in May, accelerating from April's 0.1% gain, while private residential construction jumped 1.2%, further evidence of a rebound in housing market. Activity at U.S. factories slowed pace since reaching its peak in February, mostly due to the stagnation of overseas markets. However, markets are expecting a pick-up in production in the second half of the year, due to a stronger demand.
© Dukascopy Bank SA