US Economy: Five-Month High

Institute for Supply Management’s factory index increased to 56.9 from 54.4. Readings greater than 50 signal growth. Consumer spending rose less than forecast in September and incomes dropped for the first time in more than a year, data from the Commerce Department also showed.
Courtesy of Business News

Manufacturing in the U.S. expanded at the fastest pace in five months in October, pointing to renewed strength in the industry that led the nation out of recession.

U.S. companies such as Caterpillar Inc. are benefiting from rising demand in overseas markets including China, where manufacturing expanded in October at the fastest pace in six months.

“Manufacturing is still at the head of this recovery,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. “That said, we have a half-speed economy and a growth rate that’ll leave unemployment too high. More easing by the Fed is a given, and it’s just a question of how much.”

The factory index was forecast to fall to 54 in October, according to the median forecast in a Bloomberg News survey of 75 economists. Estimates ranged from 52 to 56.8. Manufacturing accounts for about 11 percent of the economy. The factory measure has shown expansion for 15 straight months.

– Courtesy of Bloomberg News