June opened with a series of reports indicating slow economic growth, but growth nonetheless. The Institute for Supply Management's latest Manufacturing Report on Business logged the fourth consecutive month of expansion.
Its PMI (formerly known as the Purchasing Managers' Index) registered 55 percent, up just 0.3 point from April, but the highest level in the last 12 months.
A PMI in excess of 41.9 percent over a period of time generally indicates an expansion of the overall economy. The PMI average for January through May was 52.4 percent, which ISM says corresponds with a 3.3 percent increase in real GDP.
ISM's New Orders Index rose 1.1 point in May. Its Production Index was up 1 point. Supplier deliveries to manufacturers slowed for the 47th consecutive month. Manufacturer inventories decreased slightly, while customers' inventories increased a point.
A report issued Monday by the U.S. Census Bureau showed new orders for manufactured goods inching up 0.3 percent in April, following a 4.1 percent increase in March. New orders have gone up five of the last six months. New orders for manufactured durable goods rose 0.8 percent in April. Shipments of manufactured durable goods were up 1.9 percent.
Last week the government revised its first quarter economic growth estimate from 1.3 percent reported earlier to an annual growth rate of 0.6 percent, the slowest since fourth quarter 2002. The agency said the downward adjustment was due mainly to inventory revisions. During first quarter increases in personal consumption expenditures and state and local government spending were partly offset by reductions in private inventory investment, residential fixed investment and federal government spending. Imports increased during the quarter and import activity is subtracted from the GDP calculations.
First quarter consumer spending and business investment "not only held up well, but was higher than previously thought," noted Commerce Secretary Carlos Gutierrez. "Numerous headwinds still haven't knocked our economy of its 22 straight quarter of growth."