Manufacturing in the U.S. expanded in December at a pace that shows the industry is stabilizing after reaching a three-year low a month earlier.
The Institute for Supply Management’s manufacturing index climbed to 50.7 last month from November’s 49.5, which was the weakest since July 2009, the Tempe, Arizona-based group’s report showed today. Fifty is the dividing line between expansion and contraction. The median forecast of economists surveyed by Bloomberg called for a rise to 50.5.
Sustained growth in the U.S., in part due to a housing rebound, and steadying overseas markets are helping underpin factory orders and keeping manufacturing from faltering. At the same time, while lawmakers moved to extend tax cuts for about 99 percent of households, corporate confidence in the economic expansion will take time to build as Congress prepares to debate spending cuts and the debt ceiling.
“The worst part of the manufacturing slowdown is behind us,” Bricklin Dwyer, an economist at BNP Paribas in New York, said before the report. “We’re seeing some decent consumer demand.” The possibility of fiscal tightening has been “limiting the ability of businesses to release their cash and increase investment.”
The median forecast was based on projections from 71 economists in the Bloomberg survey. Estimates ranged from 48 to 52.
Stocks held gains after the figures as lawmakers passed a bill averting immediate tax increases on most Americans. The Standard & Poor’s 500 Index jumped 2.1 percent to 1,455.64 at 10:15 a.m. in New York. Bloomberg
