2018.09.0410:24:00UTC+00U.S. Manufacturing Index Unexpectedly Indicates Faster Growth In August

Activity in the U.S. manufacturing sector unexpectedly grew at a faster rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its purchasing managers index climbed to 61.3 in August from 58.1 in July, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 57.7.

The unexpected increase by the headline index came as the new orders jumped to 65.1 in August from 60.2 in July and the production index surged up to 63.3 from 58.5.

The report said the employment index also rose to 58.5 in August from 56.5 in July, indicating an acceleration in the pace of job growth in the manufacturing sector.

Meanwhile, the ISM said the prices index dipped to 72.1 in August from 73.2 in July, pointing to a slowdown in the pace of price growth.

"Demand is still robust, but the nation's employment resources and supply chains continue to struggle," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee

"Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations," he added. "Panelists are actively evaluating how to respond to these business changes, given the uncertainty,"

On Thursday, the ISM is scheduled to release a separate report on activity in the service sector in the month of August. The non-manufacturing index is expected to inch up to 56.0 in August from 55.7 in July.