The national look at manufacturing accelerated from 53.5 in May to 55.3 in June, the 23rd straight month of expansion. A reading above 50 is an indication that manufacturing activity is moving ahead.
But the good news (a sigh of relief might be a better way to describe June’s increase) must be tempered by the fact that a jump in inventories was responsible for much of the gain – 48.7 to 54.1.
Nothing worrisome but worth noting.
New orders and production did rise slightly, suggesting stability, but the increase in inventories may hamper production down the road.
Meanwhile, costs are still a burden for most manufacturers. Gasoline and a host of commodities have dropped in price but prices paid managed just a modest decline of 8.5 points to 68.0.
Despite the modest concern from some of the internals in the survey, stocks viewed the report in a favorable light and rallied following the release of the index.
All in all, today's report is just the latest indicating that the recovery still has legs. Short legs, but nonetheless, we're still moving forward.
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