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Manufacturing makes unexpected leap in June

by Adam Russett on July 1, 2011

Perhaps it was one of the most unexpected announcements, particularly given the continuing shockwaves the industry is feeling from the recession, but that doesn't mean that a report's findings were unwelcome – manufacturing experienced a significant boost in the month of June. 

In fact, this marks the first time in four months that the field has grown. CNBC.com characterizes the growth as a "sign of optimism for the sputtering economy." Overall, the leap exceeded expectations. The Institute for Supply Management estimated that the index of national factory activity rose to 55.3 at a time when some economists believed manufacturing would stall and drop to a level of 51.8.

Stocks already benefiting from a headwind due to the Greek austerity measures surged at the report's findings, with the Dow Jones industrial average rising a 90 points in the morning, according to The Associated Press.

The momentum all started when Nike announced unexpected growth for the past quarter, which many shareholders took as a sign that shoppers were still buying despite the worries about high gas prices. The news source reports that the next major earnings will be released on July 11, which could further bolster economic growth or hinder it.

This may have been the Dow Jones' best week in a year, The AP states.

As for other sectors, not everything seemed to be as bright as manufacturing. Construction appears to be hard-hit, with private and public projects stumbling in May, CNBC.com reports. Despite rhetoric from politicians about investing in national infrastructure, public works such as highways and school maintenance dropped 0.8 percent in May, after a decline of 2.4 percent in April.

Meanwhile, spending on private apartment and home projects dropped by 2.1 percent. Overall, this construction sector fell by 0.4 percent.  

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