Manufacturing growth accelerated in June to its fastest in over a year as the economy picked up momentum, according to a report published on Monday.
In fresh evidence that the factory sector is so far weathering a persistent slump in housing, the Institute for Supply Management's manufacturing index rose to 56.0 in June from 55.0 in May, surpassing forecasts for no change.
The June reading was the survey's highest since April of 2006 and the report reinforced the view that economic growth was recovering after nearly stalling in the first quarter.
We continue to see a rebound in growth in the second half, said Don Kowalchik, debt strategist at A.G. Edwards & Sons in St Louis, Missouri.
Providing some relief on inflation, the ISM's prices paid component eased to 68.0 from 71.0, but there were few signs of a pickup in employment, which edged down to 51.1 from 51.9.
Encouraged on the prospect of strong corporate profits, the stock market added to early gains on the news, which countered a wave of risk aversion that hit the markets last week.