WASHINGTON D.C. (AP) A pair of upbeat reports Monday reinforced rising optimism about the nation’s economic recovery: Manufacturing expanded in November at its fastest rate in nearly two decades, while October was the best month on record for construction spending.
"We’re clearly coming out of the woods,’ said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.
The Institute for Supply Management’s manufacturing index soared for a fifth consecutive month, and at its fastest clip since December 1983. The index stood at 62.8, a large increase from the October reading of 57 and well above analysts’ expectations of 58.1.
An index above 50 indicates expansion; one below 50 indicates manufacturing activity is contracting.
Economists said the most encouraging detail in the manufacturing report was an employment increase –– the first time the industry has added jobs in more than three years.
"If factory employment is starting to improve –– and that has been one of the toughest nuts to crack –– then we are likely to see growth across all sectors,’ said Douglas Porter, senior economist at Nesbitt Burns Securities of Chicago. "That is truly an encouraging result."
President Bush hailed Monday’s manufacturing report as evidence that his administration’s tax cut was helping improve the finances of ordinary Americans as well as the economy at large.
"With all these actions, we are laying the foundation for greater prosperity and more jobs across America so every single citizen has a chance to realize the American dream," Bush told donors at a fund-raiser in Dearborn, MI.
Also Monday, the Commerce Department reported that the total value of building projects under way came in at a seasonally adjusted $922 billion in October –– an all-time monthly high. The 0.9 percent increase from the previous month was even better than the 0.6 percent rise that analysts had forecast.
The strength in construction was fairly broad-based, with spending by private builders on residential construction and spending by government on big public works projects each posting the highest monthly level on record.