WASHINGTON — Brighter news on manufacturing is offering more hope that the longest recession since World War II is near an end. But with construction and many other segments of the economy still weak and unemployment rising, any rebound likely will be slow.
A key gauge of manufacturing showed Wednesday that industry activity declined less than expected in June. The Institute of Supply Management’s manufacturing index posted a reading of 44.8 — the best showing since last August, a month before the financial crisis erupted with force.
“I think the great recession is winding down,” said Mark Zandi, chief economist at Moody’s . “Retailing should firm a bit in the next few months, helped by the stimulus package, and I think lean inventories will trigger production increases.”
After a period last winter when the economic news was unrelentingly bad, many analysts said the mixed nature of the new reports showed an economy starting to turn the corner. But they cautioned against expecting anything but a weak recovery.
The 44.8 reading for the ISM manufacturing index in June was up from 42.8 in May. Any reading below 50 is viewed as a signal of contraction in manufacturing.
But economists were heartened: This is the second straight month that the index has been above 41.2. ISM analysts said this was consistent with an expansion for the overall economy.
