Manufacturing in the United States grew more than forecast in January. It reached a nine month high and a sign that the industry was starting to improve. The Institute for Supply Management reported that its manufacturing index went up to 53.1 in January from 50.2 the previous month. Readings above 50 show expansion. The data exceeded the average forecast of 50.7 in the survey conducted by Bloomberg.
Stocks went up after the report showed gains in orders, factory employment and production after a fourth quarter gain in consumer purchases and a rebound in business spending. The recovery of the housing sector and the stabilization of markets abroad show factories may keep adding to the growth of the world’s largest economy in 2013. The Standard & Poor’s 500-stock index increased 0.8 percent to 1,509.7.
Another report released today showed hiring increased in January after accelerating more than the initial estimate at the end of 2012. This shows that the US labor market was improving even when the lawmakers were battling over the federal budget.
Estimates for the January ISM index in the poll made by Bloomberg ranged from 49.2 to 52.5. Chairman Bradley Holcomb of ISM said that the economy is off to a great start but he gave the warning that the nation is not out of the woods yet.
ISM’s production index increased from 52.6 to 53.6. New orders increased to 53.3, which is the highest since May. The employment gauge increase to a seven month high of 54 from 51.9 in December. The measure of orders waiting to be filled dropped to 47.5 from 48.5.