US manufacturing bounces back in June

Activity in the US manufacturing sector picked up slightly in May Production was up but employment was not

US manufacturing recovered in June from an unexpected dip in May, according to an industry survey, although the level of hiring in the sector was the weakest for nearly four years.

The index of national factory activity as recorded by the Institute for Supply Management (ISM) rose to 50.9 in June from 49.0 in May.

A reading above 50 indicates growth.

Earlier, a separate survey for the eurozone manufacturing sector showed activity there at a 16-month high.

Recovery doubts

The US survey showed the gauge for new orders rose to 51.9 from 48.8, while the production measure leapt from 48.6 to 53.4.

Employment, however, gave its lowest reading since September 2009, falling to 48.7 in June from 50.1 in May.

The latest official growth figures for the US economy, released last week, showed an annualised growth rate of 1.8% for the first three months of the year, instead of the 2.4% originally estimated.

The weak employment reading in the PMI survey may add to worries about the strength of the US economy. The US Federal Reserve has indicated that it will slow down its $85bn-a-month bond purchases if the economy continues to recover.

But Paul Dales, senior US economist at Capital Economics, said he believed the survey underestimated employment numbers.

Official figures on US employment are due to be released on Friday.

Mr Dales suggested these would show the US economy added 150,000 jobs last month, rather than the 50,000 he said was suggested by the ISM data.

China slows

Earlier on Monday, a PMI survey for eurozone manufacturing suggested economic conditions were improving, with the reading for the bloc as a whole rising to 48.8, a 16-month high.

Spain's manufacturing activity recorded its strongest reading for more than two years in June.

However, separate data indicated that the eurozone unemployment rate reached 12.1% in May, its highest rate on record.

China reported a slowdown in growth of its manufacturing sector, underlining concerns that its economic recovery continues to remain fragile.

The official manufacturing PMI measure fell to a four-month low of 50.1 in June, from 50.8 in May.

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