US manufacturing grows
NEW YORK, July 1: US manufacturing grew at a surprisingly strong pace in June, suggesting the global economy is starting to shake off its recent weakness, but the sector lost steam for a second month in Europe and Asia.
The US Institute for Supply Management report may offer some relief to Federal Reserve officials who have argued that many of the factors holding back the US recovery are temporary.
Economists cautioned it was too soon to say the US recovery had overcome the malaise of the first half of 2011.
“Even though the US ISM surprised to the upside, you are still seeing evidence of a soft patch globally. There is still a lot of uncertainty out there,” said Michael Hanson, senior economist at BofA Merrill.
Purchasing managers’ indexes in Asia and Europe slid to multi-month lows in June as factories fought a twin battle with weak consumer demand overseas and tightening monetary policy at home.
Economists have blamed a combination of supply disruptions due to the devastating earthquake and tsunami in Japan, oil price rises and Europe’s sovereign debt crisis for the sputtering global recovery.—Reuters