-Chris Williamson, Markit
Factories across the US reported on a strong jump in production during June, being spurred by a accelerated foreign demand for US goods. According to the Markit release, the purchasing managers' index went up to 51.3 last month, up from 50.7 in May, thus reaching a three-month high. However, it is worth to point out, that the data was revised down slightly from the flash estimate of 51.4. The following numbers show that weakness in the April and May readings confirms that the second-quarter overall was the weakest since the third quarter of 2009, but there are still hopes that sector is stabilising. Moreover, there was a rise in new orders at the strongest pace since March, while export orders, in turn, ticked up at the fastest pace since September 2014.
Overall, a slight softening in the dollar from the record levels being reached late last year and at the beginning of 2016 has helped US firms sell more goods abroad, while stabilization in the price of crude oil has helped factories connected to the energy patch. In the meantime, manufacturing trends will have relatively small impact on Federal Reserve policy decisions, since the Fed is more concerned with the reassurance that the industrial sector is showing signs of stabilisation.
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