Manufacturing in U.S. Expands More Than Forecast (Update2)
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By Courtney Schlisserman
Sept. 1 (Bloomberg) -- Factories in the U.S. expanded in August for the
first time in 19 months, helping lead the economy out of the worst recession
since the 1930s.
The Institute for Supply Management’s factory
gaugehttp://www.bloomberg.com/apps/quote?ticker=NAPMPMI%3AINDincreased
to 52.9, exceeding forecasts and the highest level since June
2007, the Tempe, Arizona-based group said today. Fifty is the dividing line
between expansion and contraction. Another report showed more Americans than
anticipated signed contracts to buy existing homes in July.
The gains indicate Federal Reserve efforts to thaw credit markets together
with the Obama administration’s “cash-for- clunkers” program and tax credits
for first-time homebuyers are reviving demand. Factories and builders, which
have accounted for half of all the jobs lost since the recession began in
December 2007, may keep growing in coming months as sales rise.
“That is the clearest sign yet that the recession is over,” Mark
Zandihttp://search.bloomberg.com/search?q=Mark+Zandisite=wnewsclient=wnewsproxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=wnnissort=date:D:S:d1,
chief economist at Moody’s Economy.com in West Chester, Pennsylvania, said
in a Bloomberg Television interview. “For the next few months, the data
should look relatively strong because of all the stimulus.”
Stocks held earlier gains following the reports and Treasury securities
dropped. The Standard Poor’s 500 index was up 0.4 percent to 1,024.61 at
10:35 a.m. in New York. The yield on the benchmark 10-year note climbed to
3.45 percent from 3.40 percent late yesterday.
Exceeds Forecast
Economists forecast the index would rise to 50.5 from July’s 48.9 reading,
according to the
medianhttp://www.bloomberg.com/apps/quote?ticker=NAPMPMI%3AINDof 77
projections in a Bloomberg News survey. Estimates ranged from 49 to
53.5. Manufacturing accounts for about 12 percent of the world’s largest
economy.
Pending sales of previously owned homes climbed 3.2 percent in July,
exceeding the 1.5 percent median forecast of economists surveyed by
Bloomberg, a report from the National Association of Realtors also showed.
The sixth consecutive increase marked the longest stretch of gains since
records began in 2001.
Other reports today showed manufacturing was gaining speed worldwide.
China’s factories expanded in August at the fastest pace in 16 months, while
European industry shrunk by the least in more than a year.
Production, Orders
The ISM’s production index jumped to 61.9, the highest level since October
2005, from 57.9 the prior month.
The group’s new orders measures increased to 64.9, the highest level since
December 2004, from 55.3. A gauge of export orders climbed to 55.5 from
50.5.
The employment index increased to 46.4 from 45.6.
The index of prices
paidhttp://www.bloomberg.com/apps/quote?ticker=NAPMPRIC%3AINDincreased
to 65 from 55. Economists had projected that the measure, which
averaged 66.5 last year, would rise to 57.8.
The supplier delivery gauge, a measure of the time it takes to receive
goods, increased to 57.1 from 52 the prior month. The measure of orders
waiting to be filled rose to 52.5 from 50.
The inventory index increased to 34.4 from 33.5. A figure below 50 means
manufacturers are reducing stockpiles.
Industry reports today may show
saleshttp://www.bloomberg.com/apps/quote?ticker=SAARTOT%3AINDof cars
and light trucks climbed to a 13.3 million annual pace in August,
the most since August 2008, according to economists surveyed by Bloomberg.
Clunkers
Ford Motor Co, General Motors
Co.http://www.bloomberg.com/apps/quote?ticker=MTLQQ%3AUSand Honda
Motor Co. were among automakers citing the popularity of the
federal cash-for- clunkers plan in announcing production increases for the
coming months.
The program, which ended Aug. 24, offered auto buyers discounts of as much
as $4,500 to trade in older cars and trucks for new, more fuel-efficient
vehicles. The program produced almost 700,000 auto sales before it ended,
the Transportation Department said Aug. 26.
Ford http://www.bloomberg.com/apps/quote?ticker=F%3AUS, the second-largest
U.S. automaker, posted its first monthly U.S. sales gain in July since 2007.
“We had a solid July sales month and we are headed toward an even stronger
August,” Ford marketing chief Ken
Czubayhttp://search.bloomberg.com/search?q=Ken+Czubaysite=wnewsclient=wnewsproxystylesheet=wnewsoutput=xml_no_dtdie=UTF-8oe=UTF-8filter=pgetfields=wnnissort=date:D:S:d1said
last week in a statement.
GM last month called back 1,350 union workers, its biggest one-time increase
in jobs since 2006, as it boosted second-half production, in part because of
“cash for clunkers.”
Smaller stockpileshttp://www.bloomberg.com/apps/quote?ticker=CBINTOTC%3AINDare
also
