US factory activity slowed less sharply in January as a key gauge of manufacturing improved for the first time since June an industry report showed on Monday, but the sector remained under pressure amid the biggest recession in decades, analysts said.
The Institute for Supply Management said its index of national factory activity rose to 35.6 in January from a nearly three-decade low of 32.9 in December, exceeding economists' median forecast for a reading of 32.6. But the report still signalled a deep decline in activity, since a reading below 50 indicates contraction in the sector.
"Overall, this still is not a report that is highly encouraging. It simply says that maybe we're finding ourselves somewhere near the bottom," said Norbert Ore, chairman of the ISM manufacturing business survey committee in New York. The prices paid subcomponent index rose to 29.0 in January from 18.0 in December. Manufacturing employment was unchanged from the month before, with a reading of 29.9 in January. New orders rose to 33.2 in January from 23.1 in December.
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