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Business Title: Manufacturing in U.S. Grows at Fastest Pace Since '04 as Recovery Quickens Feb. 1 (Bloomberg) -- U.S. manufacturing unexpectedly accelerated in January at the fastest pace since May 2004, reinforcing signs of strength in the expansion at the beginning of the year. The Institute for Supply Management’s factory index increased to 60.8 from 58.5 in December, the Tempe, Arizona- based group said today. Readings greater than 50 signal growth, and economists projected a decline to 58, according to the median forecast in a Bloomberg News survey. Orders surged to a seven-year high, and a measure of factory employment jumped to the highest level since 1973. Stocks rose and Treasuries fell as the figures, combined with manufacturing growth in Europe and China, underscore an improving global economy. Caterpillar Inc. is among U.S. companies reporting better sales that stem from a pickup in Americans’ spending and business investment as well as expanding markets in developing nations. “Businesses have figured out the economic recovery has legs so they’re growing more confident about expanding production and new orders and increasing hiring,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Manufacturing is making a very decent contribution to growth.” Stocks rose after the report and as United Parcel Service Inc. beat earnings projections. The Standard & Poor’s 500 Index gained for the seventh day in the last eight, rising 1.1 percent to 1,299.75 at 10:37 a.m. in New York. The yield on the benchmark 10-year note increased to 3.44 percent from 3.37 percent late yesterday. Estimates in the Bloomberg survey of 78 economists ranged from 56 to 59.5. Europe and China Manufacturing in the U.K. grew at a record pace last month, while the industry also expanded in China. The U.K. gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply jumped to 62 in January from 58.7 a month earlier. A reading of 52.9 for a purchasing managers’ index released by China’s logistics federation on its website exceeded the 50 level dividing expansion and contraction. A measure from HSBC Holdings Plc and Markit Economics rose to 54.5 in January from 54.4. The ISM’s measure of new orders in the U.S. jumped in January to 67.8, the highest since January 2004, from 62. The employment gauge increased to 61.7 from 58.9 in the prior month. The employment gauge “sets us up for a good number for January payrolls,” Silvia said. Economists project a 10,000 increase in factory payrolls last month, according to the median forecast in a Bloomberg survey before the Labor Department’s Feb. 4 report. All payrolls may have increased 142,000. Production, Exports The group’s production index rose to 63.5 from 63, while a measure of export orders surged to 62 from 54.5. A gauge of prices paid increased to 81.5 from 72.5. The inventory index rose to 52.4 from 51.8 while a gauge of customer stockpiles increased to 45.5 from 40. A figure lower than 50 means manufacturers are reducing stockpiles. Recent U.S. regional factory reports underscore the strength of manufacturing at the start of the year. The Institute for Supply Management-Chicago Inc. said yesterday that its business barometer rose in January to the highest level since July 1988. The Federal Reserve Bank of New York on Jan. 18 reported manufacturing accelerated in that region in January, while the Philadelphia Fed said two days later that factories in that area expanded for a fourth month. ‘Stronger Every Day’ “The environment continues to improve,” Jeffrey Immelt, chief executive officer of General Electric Co., said on a Jan. 21 conference call. “The economy can get a little bit stronger every day.” GE last month posted its third straight quarter of profit growth, beating analysts’ estimates, driven by a rebound in its finance unit, health-care and transportation divisions. Caterpillar, the world’s largest maker of construction equipment, posted fourth-quarter profit that topped analysts’ estimates as sales advanced in China, Australia and Latin America. The Peoria, Illinois-based company last week said sales climbed 62 percent to $12.8 billion from $7.9 billion in the year-ago quarter. The company said 2011 sales will exceed $50 billion, compared with $42.59 billion in 2010. More Upbeat “Over the past quarter, we’ve become somewhat more positive about economic growth in the developed economies of North America, Europe, and Japan,” Mike DeWalt, director of investor relations at Caterpillar, said on a Jan. 27 teleconference. “And we’re now expecting the U.S. economy to grow about 3.5 percent in 2011.” The manufacturing industry, which accounts for about 11 percent of the economy, led the recovery from the recession as businesses rebuilt stockpiles they’d slashed during the slump. Rising exports have also spurred factory output. Further gains in manufacturing may come from a pickup in consumer spending, which accounts for about 70 percent of the U.S. economy. Americans’ purchases rose at a 4.4 percent pace in the fourth quarter, the fastest since the first three months of 2006, while the economy grew at a 3.2 percent rate, the Commerce Department reported last week. Economists last month boosted forecasts for growth this year, reflecting a pickup in consumer spending and passage of an $858 billion bill extending tax cuts for two years. The legislation also continues expanded unemployment insurance benefits through 2011, trims payrolls taxes and includes accelerated tax depreciation for equipment purchases. Auto dealers are also seeing improved demand. Car sales in December rose to a 12.53 million unit pace, the highest since the government’s cash-for-clunkers program in August 2009, according to industry data.
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#2. To: BS (#0)
Please subtract out parts made in China, etc. and then assembled into finished products here in the US....this is considered US manufactured product. Get back to us with those revised numbers, and do pick up a new set of Obama knee pads. Thank-you and enjoy your day in Detroit.
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