Anemic U.S. factory data points to moderate growth bounce
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. factory activity failed to gain steam in April after slowing for five straight months and demand for automobiles softened, suggesting the economy was struggling to find momentum after growth almost stalled in the first quarter.
Other data on Friday showed construction spending hit a six-month low in March, also indicating that the anticipated acceleration in growth in the second quarter could disappoint. That could see the Federal Reserve delaying raising interest rates until later this year.
The economy expanded at a 0.2 percent annual pace in the first three months of the year, slammed by bad weather, a strong dollar and a now-resolved labor dispute at the West Coast ports, as well as lower oil prices, which have undercut domestic energy production.
"The reacceleration in growth will not come fast enough for many, especially those looking for a liftoff by the Fed to happen sooner," said Diane Swonk, chief economist at Mesirow Financial in New York.
The Institute for Supply Management said its index of national factory activity was at 51.5 in April, matching the March reading, which had been the lowest since May 2013.
The index had declined since November and economists had expected it to rise to 52 in April. A reading above 50 indicates expansion in the manufacturing sector.
While new orders rose last month, a gauge of factory employment contracted for the first time since May 2013 and recorded its lowest reading since September 2009.
Manufacturing has been hit by the dollar's 12 percent appreciation against the currencies of the United States' main trading partners since June. Continued...