Growth in the nation’s manufacturing section accelerated in November for the first time in four months, and consumer spending and income posted healthy gains in October, according to two reports released Wednesday.
The Institute for Supply Management said its factory index for last month rose to 57.8 from 56.8 in October. Economists had forecast a reading of 57. A figure above 50 indicates expansion. The index has been above that level since June 2003, but the increase was the first since July.
“The manufacturing sector is still growing at a healthy pace, and that’s consistent with the decent growth in the overall economy,” said Ethan Harris, chief U.S. economist at Lehman Brothers Inc. in New York.
The new orders index rose to 61.5 from 58.3 in October. The production index, a gauge of work being performed, fell to 57.0 from 58.9. The employment index increased to 57.6 from 54.8. The prices paid index slid to 74.0, the lowest level since December 2003, from 78.5.
“The drop in the price index is noteworthy, though it is still far enough above 50 to suggest ongoing price pressure,” said Christopher Low, chief economist at FTN Financial in New York.
The employment index “supports our expectations of a solid 225,000 rise in payrolls in November,” he said. The Labor Department is scheduled to report that figure Friday.
Also Wednesday, the Commerce Department said consumer spending rose 0.7 percent in October after a 0.6 percent gain in September. Income increased 0.6 percent, the biggest jump since May.
Disposable income, or the money left over after taxes, jumped 0.6 percent, but adjusted for inflation it rose 0.2 percent.
“A lot of the extra spending in October was taken up by higher prices of gasoline and food,” said Nigel Gault, research director at Global Insight Inc., an economic forecasting firm in Lexington, Mass.
The savings rate in October fell to 0.2 percent, the lowest since the same month in 2001.
