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The nation's manufacturing base, which has been expanding right along, even through the long and difficult winter that just passed, continued to show aggregate growth in May--and after some earlier misstep by the industry source supplying the data, the data suggested continuing improvement.

Specifically, the Institute for Supply Management, the Tempe, Arizona trade group, reported earlier this morning that the nation's manufacturing sector had posted a May reading of 55.4. Initially, the ISM had stated that the result was a less-compelling 53.2 The revised number was well above the 50.0 breakeven line between a growing manufacturing sector and one that is contracting, and was also nominally above the April result of 54.9 and in line with expectations of 55.5.

All told, this was the 12th month in a row that this industrial category had shown improvement. Within this report, however, we note that the employment sub-index dropped from 54.7 in April to 51.9 for last month. Here, expectations had been for a reading of 55.0 in the latest month. Also, new orders slowed their rate of growth, easing back from 55.1 to 53.3. But prices increased, going from 56.5 to 60.0. The forecast for this sector had been 57.0.

Other areas showing a little slower growth last month were production, supplier deliveries, backlogs, and exports. Categories suggesting increased growth were limited to the aforementioned prices. It should be noted that this result equaled the reading in February, but was above the January result of 51.3. Better gains had been posted in March and April. The range for the past 12 months has been 57.0 (in November) to 51.3 (in January).

As to what the respondents noted, they observed that growth was recorded in 17 of the 18 industries surveyed, led by increased activity in furniture and related products, electrical equipment, and appliances. As to remarks by the nation's purchasing managers, they noted that steel bars were in high demand, while food, beverage, and tobacco products were also seeing strong orders. On the other hand, there was softness observed in the defense industry.

Taken as a whole, this was a decent report, but we note that this sector has been up and down over the life of this now five-year-old business recovery, so month-to-month gyrations should not be viewed as overly important.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.