Business Activity in U.S. Expands for a Second Month
Business activity in the U.S. expanded in December for a second month, easing concern that a lack of progress on the federal budget would prompt a slump in manufacturing.
The MNI Chicago Report’s business barometer rose to a four- month high of 51.6 from November’ 50.4. A reading of 50 is the dividing line between expansion and contraction. The median estimate in a Bloomberg survey called for the gauge would rise to 51.
The figure corroborates another report that showed manufacturing in the Philadelphia area expanded by the most in eight months, pointing to stability in the industry. With companies tempering equipment orders in the event that more than $600 billion in automatic tax increases and government spending cuts take place next year, an improvement in housing and sustained consumer spending has taken the lead in underpinning the economy.
“Business investment is showing signs of stabilizing but it’s still very soft, and I think that’s going to be taking some steam out of manufacturing over the next couple of months,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “We’re in the midst of a hand-off from manufacturing to housing as the big driver of the U.S. economy.”