US Midwest factory activity shows robust growth in November

Posted on November 30, 2016

Manufacturing activity growt in the US midwest soared past analysts’ expectations in November, rebounding from a disappointing October to reach its highest point since January 2015.

The Institute for Supply Management-Chicago’s purchasing manager’s index, a key economic indicator, rose to 57.6, well over analysts’ prediction of 52.5 and a healthy leap over the anemic 50.6 reading from a month earlier. Readings over 50 point to expansion, while figures below that point to contraction.

New orders rose strongly, as did production to recover nearly all of its losses from October, said the report. Order backlogs also jumped out of contractionary territory, and supplier deliveries rose, albeit more modestly. Nevertheless, higher orders and output did not help employment, as the report showed that demand for labour fell during the past month.

“Strength in orders, a recovery in oil prices and the stronger dollar have all impacted businesses with varying degrees,” said Shaily Mittal, a senior economist at MNI Indicators.

Respondents to the survey also reported being modestly optimistic about the outlook for 2017, despite some uncertainty about monetary policy and the political climate under US president-elect Donald Trump.

The survey is the latest in a string of positive economic data released this week. Earlier today, Commerce Department data showed that US personal income had grown at its fastest rate since April. Yesterday, figures showed that the US economy had expanded during the third quarter at its fastest pace in two years.

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