US factory output grew more slowly in January as companies received fewer orders, although managers did show a renewed desire to hire new workers, an industry survey showed on Tuesday. As manufacturers began the new year, the Institute for Supply Management said its index of national manufacturing activity slipped to 56.4 in January from 57.3 in December, below forecasts for a dip to 57.0. "The manufacturing sector hit a bump in the road," said Anthony Chan, chief economist at Banc One.
The sector was still growing, however, as denoted by a 20th straight month of readings above 50. And in a sign that a sector long-plagued by tough job conditions is seeing more employment creation, the labour market index jumped to 58.1 from 53.3.
The jobs component fuelled hopes that the government's employment report for January due out on Friday might offer a pleasant surprise on the labour market.
But future sales did not look as bright. Orders for new products declined, with that measure softening to 56.5 from 62.6.
The index is compiled from monthly responses of purchasing executives at more than 400 firms producing everything from textiles and chemicals to paper and metals.
The bond market found some support in the ISM figures, but gains were limited given the proximity of the Federal Reserve's decision on interest rates.