U.S. manufacturing and construction are growing steadily, according to estimates from the Institute for Supply Management and the Census Bureau released Monday.
The ISM manufacturing index registered 50.9 percent for June, indicating expansion, after showing contraction in May. The survey of 300 manufacturing companies also showed growth in the overall economy and in new orders for factories. Manufacturing employment, however, fell for the first time since September 2009, according to the survey. The survey’s results were roughly in line with economists’ expectations.
Separately, the Census Bureau reported that construction spending increased by 0.5 percent in May, 0.1 percent below market expectations. Construction is up 5.4 percent over the May 2012 level. Based on the latest numbers, construction is on pace to tally $874.9 billion for 2013. Public sector construction grew faster than private, though private residential construction rose 1.2 percent to the highest level since October 2008.
Both reports suggest that U.S. economy is slowly improving. The major economic indicator this week will be the June jobs report, due out from the Bureau of Labor Statistics on Friday morning. Analysts anticipate that the report will show nonfarm payroll employment growing by 161,000, after adding 175,000 last months. The unemployment rate is also expected to fall to 7.5 percent. The May unemployment rate was 7.6 percent, having risen 0.1 percent the month before.
Although the jobs report will come the day after Independence Day celebrations and while many Americans are off work, analysts are watching economic indicators closely to see if they match the Federal Reserve’s projections. At its latest meeting, the Fed’s monetary policy committee projected that a gradually improving economy and slowly falling unemployment would lead to a slowing of its stimulus program by the fall.