7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Factories may bolster US growth push

WASHINGTON: US manufacturing grew in November at its quickest pace in five months, with a rise in domestic demand suggesting factories could provide a boost to economic growth in the fourth quarter.

Other data yesterday showed a drop in new claims for jobless benefits, although they remained elevated due to Superstorm Sandy, and only a marginal improvement in consumer sentiment.

Financial information firm Markit said its US "flash", or preliminary, manufacturing Purchasing Managers Index rose to 52.4 from a three-year low of 51 in October. A reading above 50 indicates expansion.

Output in the factory sector and domestic new orders also grew at their fastest pace since June, while the pace of hiring in the factory sector was the swiftest in four months.

Some respondents said efforts to rebuild after Sandy may have accounted for some of the increased demand.

The data gives a positive signal for economic growth in the last three months of the year, although Sandy continues to make it more difficult to read the underlying health of the economy.

"Stripping out the short-term boost from Sandy, however, and output is probably flat," said Paul Dales, an economist with Capital Economics in London. "That's unlikely to change much when the global economy is set to remain weak," he said.

Separately, the Labour Department said initial claims for state unemployment benefits dropped 41,000 to a seasonally adjusted 410,000.

Despite the drop, the level of claims remained elevated due to Sandy, a sign of the substantial disruption to the labour market from the storm.

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