Factory, construction growth boost 2014 outlook
WASHINGTON – Expectations are rising for a stronger U.S. economy in 2014 after reports Thursday showed solid growth in manufacturing and construction spending at the end of last year.
Factory activity in December stayed near a 2½-year high. Americans are buying more cars and homes, increasing demand for steel, furniture and other manufactured goods. Manufacturers have boosted hiring to meet that demand and may add jobs at a healthier pace this year.
And builders stepped up spending on home construction in November, despite recent increases in borrowing rates. That suggests many remain confident in the housing recovery.
The economy has had bursts of healthy growth since the recession ended in June 2009, only to be followed by disappointing slowdowns. But many analysts think growth is now more sustainable.
The Institute for Supply Management, a trade group of purchasing managers, said Thursday its index of manufacturing activity slipped to 57 in December from 57.3 the previous month.
But that’s still the second-highest reading since April 2011. And any reading above 50 signals growth.
The ISM’s measure increased for six straight months through November.
A measure of new orders rose to the highest level since April 2010. And a gauge of hiring increased to its highest level since June 2011.
Separately, construction spending rose 1 percent in November to a seasonally adjusted annual rate of $934.4 billion, the Commerce Department said. That’s the highest in more than four years.