Fri, Jan 04, 2013 - Page 15 News List

US manufacturing growing

AP, WASHINGTON

US manufacturing grew slightly last month and factory hiring increased. The modest gain suggests the economy entered the new year with some momentum.

The Institute for Supply Management (ISM) said on Wednesday that its index of manufacturing activity rose to 50.7 last month. That was up from a reading of 49.5 in November, which was the lowest reading since July 2009, one month after the recession ended.

A reading above 50 indicates growth, while a reading below signals contraction. The ISM is a trade group of purchasing managers.

A measure of employment also increased last month to 52.7, up from 48.4 in November, which was the first time the employment gauge fell below 50 in three years.

Factories have cut jobs in three of the four months through November, according to government data. The jump in employment in the ISM survey suggests manufacturers may have stepped up hiring last month.

The US Labor Department releases last month’s jobs report today.

However, a gauge of new orders was unchanged and production grew more slowly, the survey reported. Manufacturers also cut back on stockpiles, a sign of concern about future demand.

“The trend in manufacturing remains weak,” an economist at High Frequency Economics, Jim O’Sullivan, said in a note to clients.

The closely watched manufacturing survey was completed before the US Congress reached a deal to avoid the “fiscal cliff.”

The last-minute deal passed on Tuesday averts widespread tax increases and delays deep spending cuts that had threatened to push the country back into recession.

However, most US citizens will see some increase in taxes this year, which will likely slow consumer spending.

The ISM survey also showed that the gauge of export orders rose above 50 for the first time in six months, which is a sign that overseas economies are improving, raising demand for US goods.

The US economy grew at a 3.1 percent annual rate in the July to September quarter, an improvement on the 1.3 percent pace in the April to June quarter.

However, economists expect growth slowed in the final three months of last year to below a 2 percent pace.

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