WASHINGTON — A batch of economic data released Thursday on the first working day of the New Year point to a solid close to 2013.
The closely watched ISM Manufacturing Index, a survey of purchasing managers, came in with a reading of 57 for December, another month in which it is above the threshold of 55, a sign of solid gains in manufacturing.
'Industrial activity is being driven by the ramping up of the housing supply chain and strong motor vehicle production as consumers meet pent-up demand for shelter and transportation,' said Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, which publishes the ISM index.
The most important two components of the index, new orders and production, both came in above 60.
'The index for new orders has exceeded 60 for five straight months, indicating an extremely healthy pace for sales growth,' Chad Moutray, chief economist for the National Association of Manufacturers, said in his blog Shopfloor.org.
And much of the demand for manufactured goods has been from within the United States.
'This all leaves the US in good shape as 2013 closed out,' Michael Montgomery, a US economist for forecaster IHS Global Insight, said in a note to investors. 'The ISM for manufacturing is showing that gains are very widespread throughout the manufacturing segment. That is the plus side of the story as the rising tide is lifting all boats."
The risk, warned Montgomery, is that 2013's gains in the United States and Japan are not being mirrored in other developed nations. That means the manufacturing spurt felt in 2013 could slow if demand for exports of U.S.-made manufactured goods falls this year.
Manufacturing wasn't the only sector to enjoy good news. Construction spending, as reported Thursday by the Census Bureau, climbed by 1 percentage point in November, well ahead of a consensus of most forecasters of about 0.7 percentage points for the month.
"We saw particularly strong growth in office construction and shopping centers_ that would not be happening unless employment was expanding and consumption was accelerating," Neil Dutta, head of U.S. economic research for Renaissance Macro Research, observed in an investment note.
Also Thursday, the Labor Department reported that first-time claims for unemployment benefits dropped a tad to 339,000 for the week ending Dec. 28, 2013. The four-week average for claims, however, nudged up to 357,250 on upward revisions to prior data.