The March ISM index rose to 62.5%, above a February reading of 61.4%. The consensus expected 61.0%, according to Standard & Poor's MarketScope. The reading indicated continuing strength, as ISM has been above 60% for five consecutive months. New orders slowed in March to 65.7%, from 66.4% in February. The employment index for March rose to 57.0%, from 56.3% the month before.
However, other data was less impressive. U.S. Construction spending dipped 0.1% in February, after skidding 0.8% in January. Initial jobless claims fell 3,000, to 342,000 in the week ended March 27, from an upward revised 345,000 in the prior week. Economists had expected a 2,000 increase. February PPI rose 0.1%, less than the 0.3% rise expected.
Fed Governor Kohn said interest rates must rise at some point as employment recovers, but not now. He said the burden of proof has not been met to boost rates in the near term. Chicago Fed President Moskow said the labor market is improving, but not strongly enough.