A report released by the Institute for Supply Management on Wednesday showed growth in the U.S. manufacturing sector accelerated to the fastest rate in over two years in the month of January.
The ISM said its purchase managers index rose to 56.0 in January from a revised 54.5 in December, with a reading above 50 indicating growth in the manufacturing sector.
Economists had been expecting the index to inch up to 55.0 from the 54.7 originally reported for the previous month.
With the bigger than expected increase, the ISM's manufacturing index reached its highest level since November of 2014.
The report showed a notable acceleration in the pace of job growth in the manufacturing sector, as the employment index jumped to 56.1 in January from 52.8 in December.
The production index also climbed to 61.4 in January from 59.4 in December, while the new orders index crept up to 60.4 from 60.3.
"The PMI, New Orders, and Production Indexes all registered their highest levels since November of 2014, and comments from the panel are generally positive regarding demand levels and business conditions," said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee.
The prices index also surged up to 69.0 in January from 65.5 in December, indicating a notably faster rate of growth in raw materials prices.
On Friday, the ISM is scheduled to release a separate report on activity in the service sector. The index of activity in the service sector is expected to edge down to 57.0 in January from 57.2 in December.
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