Manufacturing surged and the jobs
market improved in December as the economic expansion
strengthened, economic reports showed.
The Institute for Supply Management’s December factory index
rose to the highest in two decades as more companies placed
orders than at anytime since 1950. First-time claims for
unemployment benefits fell to 339,000 last week, the lowest in
almost three years.
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“This could be the start of a prolonged expansion” like
the expansion of the 1990s, said William Hummer, chief economist
at Chicago-based Wayne Hummer Investments LLC, which manages
about $4.1 billion in assets. “It’s hard to imagine anything
that could really derail this recovery.”
Charged by federal tax cuts and the lowest federal funds
interest rate since the 1950s, the U.S. economy will grow 4.4
percent this year, based on the median estimate in a Bloomberg
News survey of economic forecasters. That would be the economy’s
best performance since 1999.
December’s ISM manufacturing index was consistent with even
faster growth, more along the lines of 7 percent, said Norbert
Ore, chairman of the group’s survey committee and a purchasing
manager at Atlanta-based Georgia-Pacific Corp. The index jumped
to 66.2 last month, the highest since December 1983, from 62.8 in
November, the group said.
The ISM employment index increased to 55.5, the highest since
December 1999, from 51 and raised expectations that the U.S. may
snap a 40-month losing streak for manufacturing jobs. That may
happen as early as next Friday’s December monthly jobs report,
based on a median forecast that predicts no change for factory
jobs, instead of a loss. Total nonfarm payroll jobs may rose
150,000, based on the median forecast.
Bloomberg News
