ISM manufacturing index beats estimates; construction spending posts biggest jump since 2016

Manufacturing activity expanded at a faster pace than forecast last month, according to the Institute of Supply Management.

The ISM manufacturing index jumped to 58.7 in May from 57.3 in April. Economists polled by Reuters expected manufacturing growth to hit 58.4 last month. May also marked the 21st consecutive month of expansion for the manufacturing sector, the data showed.

A reading above 50 for the index indicates expansion in the manufacturing sector, and a reading below 50 signals contraction.

U.S. construction spending rebounded more than expected in April as investment in private
construction projects notched its biggest gain since 2012, offsetting a drop in public outlays.

The Commerce Department said on Friday construction spending surged 1.8 percent, the largest increase since January 2016, after an unrevised 1.7 percent decline in March.

Economists polled by Reuters had forecast construction spending rebounding 0.8 percent in April. Construction spending accelerated 7.6 percent on a year-on-year basis.

In April, spending on private construction projects jumped 2.8 percent, the largest increase since January 2012, reversing March’s 2.6 percent drop. Outlays on private residential projects shot up 4.5 percent, the biggest rise since November 1993, following a 4.1 percent plunge in March.

Spending on nonresidential structures rose 0.8 percent in April after falling 0.6 percent in the prior month.

Investment in public construction projects decreased 1.3 percent after rising 1.2 percent in March. Spending on federal government construction projects tumbled 10.2 percent. That
followed a 1.8 percent increase in March.

—CNBC’s Fred Imbert contributed to this report.