U.S. Institute for Supply Management said its index of national factory activity jumped to a reading of 60.2 last month from 58.7 in May.

The ISM noted that demand remained "robust, but the nation's employment resources and supply chains continue to struggle." It said manufacturers were "overwhelmingly" concerned about the impact of tariffs imposed by the Trump administration on a range of imported goods including steel and aluminum.

The ISM's supplier deliveries sub-index soared 6.2 points to 68.2 last month, the highest level since May 2004 and accounting for the bulk of the increase in the ISM index.

A lengthening in suppliers' delivery time is normally associated with increased activity, which is a positive contribution to the ISM index.

The ISM survey's new orders index slipped as did the measure of factory employment. Machinery manufacturers reported difficulties finding qualified workers, and several industries complained about trucking challenges last month.

While the prices paid index also fell in June, that was probably because of a decline in crude oil prices. Manufacturers continued to report surging input costs, with furniture makers describing transportation costs as "going through the roof."

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