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Factories Grease Skids for Growth

Wall Street Journal (12/03/13) Jonathan House

U.S. factory activity expanded in November for the sixth straight month, demonstrating stronger demand that could boost next year’s growth prospects. The Institute for Supply Management on Monday said its index of manufacturing activity rose to 57.3 from 56.4 in October. Readings above 50 indicate expansion. The report pointed to broad-based strength for factories. Measures of new orders and exports showed improvement. The employment index rose to its highest level in more than a year, a positive sign ahead of the Department of Labor’s November jobs report on Friday.

U.S. factories still face headwinds. Federal budget reductions, which reduced defense spending earlier this year, could weigh on the sector further if January’s scheduled cuts take effect. And while key export markets in Europe and Asia have improved, their recoveries are incomplete.