US services industry activity rose to the strongest level in 8 ½ years while factory orders increased in June, indicating that the economy started on a strong note in the second quarter.
The Institute for Supply Management reported on Tuesday that its services gauge grew to 58.7, the most since December 2005, compared with June’s reading of 56.0. New orders rose to their strongest level since August 2005. A measure above 50 shows expansion, reported Reuters.
Meanwhile, the Commerce Department reported that manufactured goods orders rose 1.1 percent in June after falling 0.6 percent a month earlier. This beat economists’ expectations of an increase of 0.6 percent. The poll, along with another one published last Friday that showed new orders in US factories jumped in July, indicates that the manufacturing sector is expanding solidly.
Orders, adjusted for the volatile transportation, increased 1.1 percent in June, the most since July 2013, as orders for machinery and electrical items, primary metals and appliances increased. Bookings for computers and other electronic products also surged. Incomplete orders in factories grew 1 percent, noted the Commerce Department.
Durable goods orders increased 1.7 percent in June, compared with 0.7 percent rise in May. The durable goods orders adjusted for transportation increased 1.9 percent. Non-defense capital goods orders, which excludes aircrafts and is a good measure of business spending plans and confidence, rose 3.3 percent.
The factory orders data revealed that inventories in June increased 0.3 percent, down from 0.8 percent gain in May. Factory shipments rebounded, rising 0.5 percent after declining by 0.1 percent in May. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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