Manufacturing in the U.S. grew in November at the fastest pace in five months, showing factories will keep supporting the economic expansion through the end of the year.
The Institute for Supply Management’s factory index increased to 52.7 last month from 50.8 in October, the Tempe, Arizona-based group’s data showed today. Readings above 50 indicate expansion, and economists surveyed by Bloomberg News projected a gain to 51.8. Orders and production grew at the fastest pace since April.
Corporate purchases of new equipment, export demand, stronger consumer spending during the holidays and leaner inventories lay the groundwork for a pickup in production. At the same time, risk of recession in Europe may restrain U.S. manufacturing, the industry that spurred the recovery.
“Manufacturing is growing at a moderate pace right now, and the sector that’s helping is autos,” Paul Ballew, chief economist at Nationwide Mutual Insurance Co. in Columbus, Ohio, said before the report. “Unless something tumultuous happens in Europe, the economy should stagger on.”
Estimates for the manufacturing index from 82 economists ranged from 50.2 to 53. While 50 is the midway point between expansion and contraction in the industry, a reading above 42.5 generally indicates an expansion in the overall economy.
Stocks were little changed after the figures, with the Standard & Poor’s 500 Index climbing less than 0.1 percent to 1,247.89 at 10:24 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 2.13 percent from 2.07 percent late yesterday.
Construction Spending
Construction spending rose for a third month in October, while jobless claims unexpectedly increased last week, other reports today showed.
Building outlays climbed 0.8 percent, reflecting gains in housing and commercial projects, the Commerce Department said. Initial claims for unemployment benefits rose by 6,000 to 402,000 in the week ended Nov. 26 that included the Thanksgiving holiday, according to the Labor Department.
