Investing.com - Manufacturing activity in the U.S. picked up the pace and rose more than expected in January, hitting its highest level in more than two years, according to an industry report released on Wednesday.
The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 56.0 last month from December’s reading of 54.5. That was its highest level since November 2014.
Analysts had forecast a smaller increase to 55.0.
A reading above 50.0 indicates expansion in the manufacturing sector, below indicates contraction.
The ISM indicated that the survey suggested that the overall economy had grown for the 92nd consecutive month.
The new orders index rose to 60.4 in January from 60.3 a month earlier.
The employment index advanced to 56.1 last month from the prior 52.8 and compared to forecasts for an increase to 53.1.
The prices paid index rose to 69.0 in January, from the previous month’s reading of 65.5 and compared to expectations for an increase to 66.0. That was the 11th consecutive increase in the price of raw materials.
"The PMI, New Orders, and Production Indexes all registered their highest levels since November of 2014, and comments from the panel are generally positive regarding demand levels and business conditions,” ISM chair Bradley Holcomb commented in the release.
After the report, which was published simultaneously with construction spending for December, the dollar strengthened. EUR/USD was trading at 1.0741 from around 1.0801 ahead of the release of the data, GBP/USD was at 1.2640 from 1.2648 earlier, while USD/JPY was at 113.84 from 113.24 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 99.97, compared to 99.49 ahead of the report.
Meanwhile, U.S. stock markets were trading higher after the open. The Dow 30 gained 60 points, or 0.30%, the S&P 500 rose 4 points, or 0.17%, while the Nasdaq Composite traded up 24 points, or 0.43%.
Elsewhere, in the commodities market, gold futures traded at $1,213.45 a troy ounce, compared to $1,213.35 ahead of the data, while crude oil was unchanged at $53.11.