US manufacturing grows, unemployment drops

US manufacturing activity expanded in July for the first time in five months, boosting optimism that a recovery in the world’s largest economy is taking hold, an industry survey showed Friday.

    US economy expands

    The Institute for Supply Management purchasing managers' index, based on a survey of supply executives, met expectations, rising to 51.8 points from 49.8 points in June.

    A reading above 50 signifies growth.

    “While the overall economy continues to improve, the manufacturing sector reversed its recent trend of contraction and grew during July for the first time in five months,” said survey chief Norbert Ore, according to AFP.

    The Institute for Supply Management surveys more than 400 companies in 20 industries when compiling the index.

    Manufacturing accounts for about 15 percent of US economic output.

    Jobless rates

    Elsewhere, a Labor department report showed unemployment last month fell for the first time in more than a year.

    The July jobless rate slipped to 6.2 percent last month from 6.4 percent the month before, the Labor Department said.

    Though the decline was caused by discouraged job-seekers leaving the work force rather than a pick-up in hiring, some analysts said the figures proves employment is a lagging indicator of economic growth.

    “Consumer demand is the locomotive, and it's accelerating, but it takes a while for that to be registered on the caboose end of things,”  Clearview Economics LLC economist Ken Mayland told Reuters.

    “This is yet another example showing employment is the caboose in this long economic train," he added.

    The US economy shed 44,000 jobs last month, the report showed.

    Unless people are actively searching for a job, workers are not counted as unemployed.

    About a million jobs have been lost in the US since the recession, signified by two consecutive quarters of economic contraction, ended in November 2001.

    The economy, which grew at 2.4 percent last quarter, needs to grow faster than 3 percent to start adding jobs, economists said, according to Bloomberg News. 

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Interactive: How does your country vote at the UN?

    Interactive: How does your country vote at the UN?

    Explore how your country voted on global issues since 1946, as the world gears up for the 74th UN General Assembly.

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.