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Manufacturing growth slows in January

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Growth the lowest in a year.

According to the Manufacturing ISM Report on Business, economic activity in the manufacturing sector expanded in January for the 20th consecutive month, and the overall economy grew for the 68th consecutive month.  However, the rate of growth in January declined to its lowest point in the last twelve months.

The January PMI came in at 53.5%, a decrease of 1.6 percentage points from December’s seasonally adjusted reading of 55.1%.  Analysts had expected a slight drop to 55.0%.

The New Orders Index registered 52.9%, a decrease of 4.9 percentage points from the seasonally adjusted reading of 57.8% in December, and the Production Index hit 56.5%, 1.2 percentage points below December’s seasonally adjusted 57.7%.

The manufacturing labor market also showed signs of cooling, with the Employment Index falling to 54.1%  from 56.0% in December.  Inventories of raw materials and prices also declined.

The report indicated that most industries, but not all, are experiencing strong demand as 2015 kicks off. The West Coast dock slowdown continues to be a problem, negatively impacting both exports and imports as well as inventories.

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