Washington, DC, August 1, 2006--A key gauge of strength of the U.S. factory sector picked up unexpectedly in July, the Institute for Supply Management reported Tuesday.
The ISM index rose to 54.7% in July compared with 53.8% in June. The index is still below the year-to-date average of 55.4%.
The price index jumped to 78.5% from 76.5% in June. This is the highest level since a record 84 last October.
The rise was unexpected. The consensus forecast of estimates collected by MarketWatch called for the index to inch lower to 53.6%.
The trade group surveys the purchasing managers at factories around the country. A reading above 50 signals expansion, while a reading below 50 indicates contraction. The index has been above 50 since May 2003.
There was a sawtooth pattern in July. New orders fell, but production increased at a faster pace, picking up the index.
New orders fell to 56.1% from 57.9% in June, while production jumped to 57.6% from 55.1% .
The employment index rose to 50.7% from 48.7%. Backlog of orders fell to 50.5% in July from 54.0% in June. Inventories rose to 50.5% in July from 46.9% in the previous month.
