"A number of comments from the panel cite adverse weather conditions as a factor negatively impacting their businesses in January, while others reflect optimism and increasing volumes in the early stages of 2014"
-ISM report
Manufacturing activity in the world's biggest economy rose at a substantially slower pace than expected in January, as new orders growth declined by the most in 33 years, pushing the overall factory activity to the lowest level in eight months, according to data released by the Institute for Supply Management.
The ISM's manufacturing PMI dropped to 51.3 in January down from a recently revised 56.5 a month earlier, with a reading above the 50 threshold indicating an expansion in the sector. The January gauge marked a second consecutive month of falling growth from November's recent peak of 57, which had been the highest since April 2011, adding to concerns the U.S. economy may be losing some steam it had enjoyed in the second half of 2013.
The ISM report indicated a broad pullback across many components in the factory sector. The biggest drop was recorded in the forward-looking new orders index, which plummeted to 51.2 from 64.4 in December, the largest monthly fall in that key component since December 1980. Indicators of production, inventory growth and employment also fell from December. The employment reading stood at 52.3, the weakest since June and well below December's 18-month high of 55.8. In the meantime, the prices index rose to 60.5 from 53.5, the highest reading since February 2013.
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