ISM survey shows U.S. manufacturing growth stronger than expected

12/01/2011 11:52 am EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

The U.S. manufacturing sector grew at the fastest rate in five months in November, according to numbers released today by the Institute for Supply Management. The ISM manufacturing index climbed to 52.7 in November from 50.8 in October. (In this index anything above 50 indicates that the sector is growing; below 50 and the sector is contracting.) The reading was near the upper end of economists’ forecasts, which, according to a survey by Bloomberg, ranged from 50.2 to 53 with the median projection at 51.8.

The continued expansion of manufacturing in the United States is in contrast to recent purchasing managers surveys in China and Europe that show this sector contracting in those economies. The index compiled by the China Federation of Logistics and Purchasing, for example, fell to 49 in November.

The auto industry was the biggest single contributor to growth in U.S. manufacturing. U.S. light-vehicle sales jumped in October to a seasonally adjusted annual rate of 13.2 million. A falling dollar, down 9% since June against a trade-weighted basket of currencies, has also contributed by boosting U.S. exports. August and September were the best months for U.S. exports on record, according to the Commerce Department.

In other words, despite everything, the U.S. economy looks like it will continue to grow at a moderate pace through the end of 2011.

 

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