Chicago Purchasing Managers Index Increases to 68.8 in January
2011-01-31 16:10:26.172 GMT
By Alex Kowalski
Jan. 31 (Bloomberg) -- Businesses in the U.S. expanded in
January at the fastest pace since July 1988, indicating the
world's largest economy has momentum at the start of the year.
The Institute for Supply Management-Chicago Inc. said today
its business barometer rose this month to 68.8 from 66.8 in
December. Figures greater than 50 signal expansion, and
economists projected the gauge would slip to 64.5, based on the
median estimate in a Bloomberg survey.
Orders, production and employment increased as
manufacturers such as Caterpillar Inc. benefited from a pickup
in consumer purchases and stronger export markets in emerging
economies such as China. Consumer purchases in the final three
months of 2010 were the strongest in more than four years,
figures last week showed.
"This fortifies the stability of the recovery," said
Maxwell Clarke, chief U.S. economist at IDEAglobal in New York.
"You definitely see traction from manufacturing going
forward."
Estimates from 41 economists for the Chicago purchasers'
index ranged from 60 to 71.3, according to the Bloomberg survey.
Data today from the Commerce Department showed Americans'
spending rose more than forecast in December. Household
purchases increased 0.7 percent, while incomes gained 0.4
percent for a second month, the figures showed.
Stocks held gains after the reports and Treasuries fell.
The Standard & Poor's 500 Index rose 0.5 percent to 1,282.74 at
11:07 a.m. in New York. The yield on the benchmark 10-year note
increased to 3.35 percent from 3.32 percent late on Jan. 28.
Orders, Employment
The Chicago group's production gauge rose to 73.7 from
December's reading of 72.2. The gauge of new orders increased to
75.7, the highest since December 1983, from 71.3. The employment
measure rose to 64.1, the strongest since May 1984, from 58.4
the prior month.
Economists watch the Chicago index and other regional
manufacturing reports for an early reading on the outlook
nationally. The Chicago group says its membership includes both
manufacturers and service providers, making the gauge of measure
of overall growth. Its members have operations across the U.S.
and abroad.
Other measures of regional manufacturing have shown
strength in January. The Federal Reserve Bank of New York on
Jan. 18 said manufacturing expanded in that region this month,
and the Philadelphia Fed said two days later that factories grew
for a fourth month.
Auto Sales
Automakers are seeing sales pick up. Car purchases in
December rose to a 12.53 million unit annual pace, the highest
since August 2009, from 12.3 million in November, industry data
showed this month.
The ISM's monthly national factory index, due tomorrow, was
probably little changed at 58 in January after 58.5 the prior
month. A reading above 50 signals expansion.
A pickup in consumer demand, which accounts for about 70
percent of the U.S. economy, could add to gains in
manufacturing. The Commerce Department reported last week that
household purchases rose at a 4.4 percent pace in the fourth
quarter, the fastest in more than four years, while the economy
grew at a 3.2 percent rate.
Consumers may further ramp up spending as they benefit from
an $858 billion bill extending all Bush-era tax cuts for two
years. The legislation also extended the window for expanded
unemployment insurance benefits through 2011, trimmed payrolls
taxes and included accelerated tax depreciation for equipment
purchases.
The manufacturing industry, which accounts for about 11
percent of the economy, has been at the forefront of the
economic recovery that began in 2009.
Caterpillar Profit
Caterpillar, the world's largest maker of construction
equipment, posted fourth-quarter profit that topped analysts'
estimates as sales advanced in China, Australia and Latin
America. Revenue climbed 62 percent to $12.8 billion from $7.9
billion a year earlier, the company said last week.
In 2011, sales will exceed $50 billion, compared with
$42.59 billion in 2010, according to the company.
"There's quite a bit of pent-up demand there yet to
come," in North America, Ed Rapp, chief financial officer of
the Peoria, Illinois-based company, said last week during a
conference call. "The tailwinds come as we get more robust
growth."
For Related News and Information:
For U.S. economy stories: NI USECO <GO>
For U.S. manufacturing stories: TNI US MAC <GO>
For stories on manufacturing and trade: TNI TRD MAC <GO>
Factory Orders and Durable Goods reports: FODG <GO>
Stories on GDP: GDP CQOQ <Index> CN <GO>
--Editors: Vince Golle, Carlos Torres
To contact the reporters on this story:
Alexander Kowalski in Washington at +1-202-654-7372 or
akowalski13@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at +1-202-624-1862 or
cwellisz@bloomberg.net.
2011-01-31 16:10:26.172 GMT
By Alex Kowalski
Jan. 31 (Bloomberg) -- Businesses in the U.S. expanded in
January at the fastest pace since July 1988, indicating the
world's largest economy has momentum at the start of the year.
The Institute for Supply Management-Chicago Inc. said today
its business barometer rose this month to 68.8 from 66.8 in
December. Figures greater than 50 signal expansion, and
economists projected the gauge would slip to 64.5, based on the
median estimate in a Bloomberg survey.
Orders, production and employment increased as
manufacturers such as Caterpillar Inc. benefited from a pickup
in consumer purchases and stronger export markets in emerging
economies such as China. Consumer purchases in the final three
months of 2010 were the strongest in more than four years,
figures last week showed.
"This fortifies the stability of the recovery," said
Maxwell Clarke, chief U.S. economist at IDEAglobal in New York.
"You definitely see traction from manufacturing going
forward."
Estimates from 41 economists for the Chicago purchasers'
index ranged from 60 to 71.3, according to the Bloomberg survey.
Data today from the Commerce Department showed Americans'
spending rose more than forecast in December. Household
purchases increased 0.7 percent, while incomes gained 0.4
percent for a second month, the figures showed.
Stocks held gains after the reports and Treasuries fell.
The Standard & Poor's 500 Index rose 0.5 percent to 1,282.74 at
11:07 a.m. in New York. The yield on the benchmark 10-year note
increased to 3.35 percent from 3.32 percent late on Jan. 28.
Orders, Employment
The Chicago group's production gauge rose to 73.7 from
December's reading of 72.2. The gauge of new orders increased to
75.7, the highest since December 1983, from 71.3. The employment
measure rose to 64.1, the strongest since May 1984, from 58.4
the prior month.
Economists watch the Chicago index and other regional
manufacturing reports for an early reading on the outlook
nationally. The Chicago group says its membership includes both
manufacturers and service providers, making the gauge of measure
of overall growth. Its members have operations across the U.S.
and abroad.
Other measures of regional manufacturing have shown
strength in January. The Federal Reserve Bank of New York on
Jan. 18 said manufacturing expanded in that region this month,
and the Philadelphia Fed said two days later that factories grew
for a fourth month.
Auto Sales
Automakers are seeing sales pick up. Car purchases in
December rose to a 12.53 million unit annual pace, the highest
since August 2009, from 12.3 million in November, industry data
showed this month.
The ISM's monthly national factory index, due tomorrow, was
probably little changed at 58 in January after 58.5 the prior
month. A reading above 50 signals expansion.
A pickup in consumer demand, which accounts for about 70
percent of the U.S. economy, could add to gains in
manufacturing. The Commerce Department reported last week that
household purchases rose at a 4.4 percent pace in the fourth
quarter, the fastest in more than four years, while the economy
grew at a 3.2 percent rate.
Consumers may further ramp up spending as they benefit from
an $858 billion bill extending all Bush-era tax cuts for two
years. The legislation also extended the window for expanded
unemployment insurance benefits through 2011, trimmed payrolls
taxes and included accelerated tax depreciation for equipment
purchases.
The manufacturing industry, which accounts for about 11
percent of the economy, has been at the forefront of the
economic recovery that began in 2009.
Caterpillar Profit
Caterpillar, the world's largest maker of construction
equipment, posted fourth-quarter profit that topped analysts'
estimates as sales advanced in China, Australia and Latin
America. Revenue climbed 62 percent to $12.8 billion from $7.9
billion a year earlier, the company said last week.
In 2011, sales will exceed $50 billion, compared with
$42.59 billion in 2010, according to the company.
"There's quite a bit of pent-up demand there yet to
come," in North America, Ed Rapp, chief financial officer of
the Peoria, Illinois-based company, said last week during a
conference call. "The tailwinds come as we get more robust
growth."
For Related News and Information:
For U.S. economy stories: NI USECO <GO>
For U.S. manufacturing stories: TNI US MAC <GO>
For stories on manufacturing and trade: TNI TRD MAC <GO>
Factory Orders and Durable Goods reports: FODG <GO>
Stories on GDP: GDP CQOQ <Index> CN <GO>
--Editors: Vince Golle, Carlos Torres
To contact the reporters on this story:
Alexander Kowalski in Washington at +1-202-654-7372 or
akowalski13@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at +1-202-624-1862 or
cwellisz@bloomberg.net.
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