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Rising prices for commodities and building materials continue leading to shortages and employment difficulties in the industry.
Stocks had initially been climbing but fell back after the data was revealed on Tuesday.
The issues affecting the manufacturing industry conflated with the fear of rising inflation have been reasons for pause in the financial district, however investors are becoming more confident that these issues will not lead to banks undoing stimulus measures.
“The market is relatively sanguine about the inflationary pressure building,” Brian O’Reilly, head of market strategy for Mediolanum International Funds, told the Wall Street Journal. “It is still a liquidity-driven equity market that is brushing off any bit of bad news.”
Major indexes are still hovering around all-time highs after a less optimistic May, though the market has now had four consecutive months of gains following the turn of the calendar to June.
President Joe Biden’s recently unveiled $6 trillion budget plan is also expected to help propel the stock market up.
Investors are still concerned about the manufacturing industry however, as issues with supply chains, overpriced commodities and an uneven labor market continue to plague the sector.
A report from the Institute for Supply Management added fuel to these fears after it acknowledged that the manufacturing economy in the U.S. is struggling with worker shortages, missing necessary supplies, extended lead times and transportation logjams. Still, the report provided plenty of reason for optimism.
“According to the Services PMI®, all 18 services industries reported growth. The composite index indicated growth for the 12th consecutive month after a two-month contraction in April and May 2020,” said Anthony Nieves, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee. “There was continued growth in the services sector in May. The rate of expansion is very strong, as businesses have reopened and production capacity has increased. However, some capacity constraints, material shortages, weather-related delays, and challenges in logistics and employment resources continue.”
Originally Appeared Here