U.S. Factories Grow At Fastest Pace In Six Months As Manufacturing Improves [View all]
U.S. factories expanded in December at the fastest pace in six months, adding to evidence manufacturing is improving from India to the U.K. entering 2012.
The Institute for Supply Management’s factory index climbed to 53.9 last month from 52.7 in November, the Tempe, Arizona- based group’s data showed today. Fifty is the dividing line between growth and contraction, and economists surveyed by Bloomberg News forecast the gauge would rise to 53.5.
Stocks surged and commodities rose as the data showed factory orders and production grew at the strongest rates in eight months while inventories were cut. Combined with another report showing construction spending (CNSTTMOM) climbed in November, the figures indicate the world’s largest economy accelerated in the final months of 2011.
“Global economic activity is showing signs of life,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp. in New York, who correctly projected the factory gauge. “Manufacturing in the early part of the year will keep expanding. It’s good to know that purchasing managers are feeling a bit better about the economic backdrop.”