NEW YORK — Factory activity picked up in June after a sluggish May, helped by lower gas prices and some easing of supply disruptions.
The Institute for Supply Management, a trade group of purchasing executives, said Friday that its index of manufacturing activity rose to 55.3. The sector has now grown for 23 straight months. Last month’s growth was the slowest in 20 months.
The stronger reading was an optimistic sign that the economy could be strengthening after a spring slump.
Stocks jumped after the report was released. The Dow Jones industrial average rose 152 points in midday trading, and broader indexes also rose.
“This is additional evidence that the recent slowdown in economic activity was temporary,” said Steven Wood, chief economist for Insight Economists. “However, the strength of the recovery is an open question, given other factors.”
A reading above 50 indicates that the manufacturing sector is expanding. Still, growth was muted from earlier this year, when the index topped 60 for four straight months. And other areas of the economy remain weak, such as housing and job growth.
Construction spending declined in May to a seasonally adjusted pace of roughly $758 billion, the Commerce Department said Friday. Budget cuts at the state and local level led to a sharp drop in government spending. Construction spending is roughly half the pace considered healthy.
