American factory growth slowed to a crawl in April and manufacturing employment just skirted contraction in a warning sign for Friday's employment report. Construction spending fell unexpectedly for the second monthly decline in the first quarter.
The national index of factory activity from the Institute for Supply Management sank to 50.7 from 51.3 in March, below the 50.9 forecast. Employment dropped to 50.2 in April from 54.2, the lowest reading since last November's 50.1, and except for that month, the weakest score since September 2009. Readings above 50 indicate expansion.
Overall U.S. economic growth improved in the first quarter with GDP rising to a 2.5% annual rate from the 0.4% pace in the fourth quarter, but the initial burst leading the year seems to be faltering, repeating a pattern of the past three years.
The Census Bureau reported that the value of new construction in March had decreased 1.7% from the previous month, a far cry from the 0.6% gain predicted by analysts. February's spending increase was revised to 1.5% from 1.2%. Over the year spending is 4.8% higher than in 2012, down from the 6.2% in February. January activity dropped 4.0%, the revision almost doubling the initial -2.1% report.
The index of new orders rose to 52.3 in April from 51.4 but export orders dropped to 54.0 from 56.0 and the business price index fell to 50.0 from 54.5. Production improved to 53.5 from 52.2.
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