Manufacturing in the U.S. expanded in November at a faster pace than projected, signaling the world’s largest economy is rising above a global slowdown.
The Institute for Supply Management’s factory index was little changed at 58.7 last month, the second-strongest level since April 2011, compared with 59 in October, the Tempe, Arizona-based group’s reported today. It exceeded the median forecast of 80 economists surveyed by Bloomberg and readings greater than 50 indicate growth.
Orders over the past four months have been the strongest in a decade as growing demand from American consumers makes up for any letdown among foreign customers. Continued progress in the labor market and the plunge in gasoline prices may give Americans an even greater ability to spend in coming months, supporting manufacturing as the year draws to a close.
“Whatever is happening abroad, this sector seems to be shrugging it off,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who projected a reading of 58.5. “There’s always the worry that the weakness in growth abroad eventually starts filtering into it but right now it’s not really obvious.”
The median estimate in a Bloomberg survey of economists called for a decline to 58. Projections ranged from 54.5 to 61. Manufacturing accounts for about 12% of the economy.
Stocks fell, sending the benchmark indexes lower for a second day, as data showed Chinese manufacturing slowed last month while fewer shoppers showed up for Black Friday sales events. The Standard & Poor’s 500 Index declined 0.5% to 2,056.83 at 10:32 a.m. in New York.
American producers keep powering ahead at the same time their global competitors slow. Factories in Germany, France and Italy unexpectedly shrank last month, according to purchasing managers’ gauges. An index of Chinese manufacturing fell as mandatory plant shutdowns during the Asia-Pacific Economic Cooperation forum aggravated a pullback in the economy.
One standout internationally was the U.K., where manufacturing growth unexpectedly accelerated in November to the fastest pace in four months as domestic demand strengthened.
The U.S. ISM’s orders index climbed to 66 from 65.8 in October. The 64.6 average over the past four months is the highest for a similar period since early 2004.
Even exports showed improvement, with the gauge advancing to 55 from 51.5 in October.
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