The year’s first working day, certainly has brought a smile on everyone’s face as the latest data showed that American manufacturing is showing signs of continuous growth. With this the sector has registered positive growth for five consecutive months reveals the data released by Institute of Supply Management, a trade group. What comes as the cherry on the icing is that the sector has actually expanded faster than expected in December.
Latest data by ISM shows that the manufacturing index read 55.9 percent in December as against 53.6 percent in November. This is the highest that the sector has reached since April 2006, when it was at 56.0 percent. Moreover, the group’s reading on new orders rose up to 65.5 percent in December as against 60.3 percent in the month of November justifying the theory of green shoots of recovery. Index on price also climbed from 55 percent to 61.5 percent.
Meanwhile, the job market, which had not gone hand in hand with the other parameters, has also shown advancements. The employment in the manufacturing index advanced to 52 percent in December as compared to 50.8 percent in the preceding month. For an economy, which has been losing close to half a million jobs every month for sometime now, this certainly brings a breather.
Supported by the positive data the stock market remained resilient on Monday. All major indices including Dow Jones, Nasdaq and S&P 500 gained close to or over 1.5 percent. The dollar also managed to trim down the losses against the euro after the news.
However, the news for the construction industry was not very good as a separate report showed prolonged weakness in the sector. It indicated a decline in homebuilding activity in November, which has pushed the investment in the sector down to six-year low. The data released by the Commerce Department shows that the construction spending has fallen 0.6 percent in November to $900.1 billion, lowest since July 2003.