Manufacturing Leading U.S. Economy on Exports, Inventories

U.S. economy expanding moderately on manufacturing activities by companies such as Cat and Cummins

Manufacturing expanded faster than forecast in April, driven by gains in exports and inventories that are keeping the industry at the forefront of the U.S. economic expansion.

The Institute for Supply Management’s factory index fell to 60.4 last month from 61.2 in March, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion and the measure has exceeded 60 for four consecutive months, the best performance since 2004.

Demand from emerging economies like China, the need to replenish stockpiles and investment in new equipment may keep benefitting manufacturers, including Caterpillar Inc. (CAT) and Cummins Inc. (CMI) Federal Reserve policy makers last week said the expansion was "proceeding at a moderate pace," buoyed by stronger business spending.

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