Manufacturing grows at fastest pace in 3½ years
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Manufacturing grows at fastest pace in 3½ years
Fender Stratocaster bodies are cleaned out after being cut down by Manuel Espinoza at the Fender factory in Corona, Calif.(Photo: Matt York, AP)
Manufacturing activity picked up at the fastest pace in more than three years in August, providing further evidence of an accelerating economy.
A closely watched index of the health of the nation's factories rose from 57.1 to 59, the highest level since March 2011, the Institute for Supply Management said. A reading above 50 means the sector is expanding. Economists expected a slight dip to 57.
Particularly encouraging was that most of the major industry gauges were positive. The production index rose to 64.5 from 61.2. A measure of new orders – which reflects future output -- increased to 66 .7 from 63.4.
The employment index slipped to 58.1 from 58.2.
Seventeen of 18 manufacturing sectors reported growth.
The humming factories represent the latest sign of an economy picking up steam. The Census Bureau said Tuesday that construction spending in July increased 1.8% to a seasonally adjusted annual rate of $981.3 billion. Economists expected a 0.8% rise.
Nonresidential spending jumped 2.5%, while residential was up 0.7%.
Other economic indicators also have picked up recently, including job growth, business investment and the housing market. The government's August employment report is due Friday, with most economists expecting a seventh straight month of 200,000–plus job gains.
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