Business Activity in U.S. Unexpectedly Grows at Faster Pace [View all]
-- Business activity in the U.S. unexpectedly grew at a faster pace in July as the economy weathered a slowdown in hiring and household spending.
A barometer from the Institute for Supply Management- Chicago Inc. increased to 53.7, the highest since April from 52.9 in June. Readings greater than 50 signal growth. The median forecast of 50 economists surveyed by Bloomberg News projected the purchasing managers’ gauge would decline to 52.5.
The need to rebuild auto inventories may be giving a boost to manufacturing, which had been a key driver of the economic recovery. The Federal Reserve is meeting this week to determine if more stimulus is needed as Europe’s fiscal crisis and the threat of more than $600 billion in U.S. spending cuts and tax increases at year’s end curbed demand.
Manufacturing is showing “modest improvement,’’ Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before today’s report. “It’s not great but it’s also not that bad.’’