Investing.com – Activity in the US manufacturing sector increased more than expected in January as new orders expanded at their quickest pace since September 2014, according to preliminary data released on Tuesday.
In a report, market research group Markit said that its flash manufacturing purchasing managers’ index (PMI) rose to 55.1 in January from the prior month’s final reading of 54.3. That was its strongest reading since March 2015.
Analysts had expected only slight increase to 54.5.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Markit highlighted that the sharp increase in new work led to faster growth of output and purchasing activity, although the growth in new export work remained muted and the pace of job creation softened slightly.
“U.S. manufacturers are seeing a bumper start to 2017, with production surging higher in January on the back of rising inflows of new orders,” Markit chief economist Chris Williamson commented.
“The survey results suggest that faster manufacturing growth and inventory rebuilding should help boost GDP in the first quarter if current trends persist in coming months,” he said, adding that “rising factory employment should also help improve consumer morale and spending.”
Williamson did note however that the strong growth and increase in price pressures may spur speculation around the next rate hike by the Federal Reserve.
After the report, EUR/USD was trading at 1.0760 from around 1.0752 ahead of the release of the data, GBP/USD was at 1.2484 from 1.2477 earlier, while USD/JPY traded at 113.10 compared to 113.28 before the release.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.05, compared to 100.13 ahead of the report.
Meanwhile, U.S. stock markets were slightly higher after the open. The Dow Jones Industrial Average gained 15 points, or 0.08%, the S&P 500 rose 3 points, or 0.14% , and the tech-heavy Nasdaq Composite traded up 11 points, or 0.20%.
Elsewhere, in the commodities market, gold futures traded at $1,215.85 a troy ounce, compared to $1,215.15 ahead of the data, while U.S. crude oil traded at $53.19 a barrel from $53.17 earlier.