U.S. ISM Factory Index Increased to 35.6 in January (Update2)

By Bob Willis
Feb. 2 (Bloomberg) -- Manufacturing in the U.S. shrank less than economists forecast in January as the drop in new orders moderated for the first time in five months.

The Institute for Supply Management’s factory index rose to 35.6 in January from 32.9in the prior month, the Tempe, Arizona- based group said. Readings less than 50 signal a contraction and the index has been below that level since February 2008.

Manufacturing is likely to keep contracting as companies from General Motors Corp. to Caterpillar Inc. cut output and shed workers. President Barack Obama last week highlighted the deteriorating economy to push for Congress to enact his recovery plan to save jobs and boost spending.