Wall Street Journal (01/02/15) Kathleen Madigan

The Institute for Supply Management reports a drop in its purchasing managers index to 55.5 in December from 58.7 in November. However, the index averaged 55.8 for all of 2014, the best reading since 2010. Moreover, the employment index rose to 56.8 in December from 54.9 in November.

“It is hard to believe that firms ramped up hiring if they were worried that conditions were weakening significantly,” says Joel Naroff, president of Naroff Economic Advisors. According to Bradley Holcomb, who oversees the ISM’s factory survey, a December survey by ISM indicates that respondents believe revenues will grow an average of 5.6% this year, leading to a 1.5% boost in employment and a 3.7% jump in capital spending.

Wall Street Journal (01/04/15) Nick Timiraos

Economists agree that the U.S. economy is among the best off as the new year begins, and some believe the upcoming December employment report from the U.S. Department of Labor will show that 2014 was the best year for job growth in 15 years. However, there are big questions about wage growth, given that a survey by the U.S. Federal Reserve shows that only the wealthiest 10% of households saw median incomes increase between 2010 and 2013.

Some economists forecast that labor costs will increase as the unemployment rate drops to its natural level, between 5.2% and 5.5%, while others expect the unemployment rate to decline even more before meaningful increases in wages are seen.

Associated General Contractors of America News Release (01/02/15)

Construction spending edged down in November but outlays for the year remained on track for a modest increase over 2013 totals, according to an analysis by the Associated General Contractors of America. Construction spending in November totaled $975 billion at a seasonally adjusted annual rate, down 0.3% from the October total but 2.4% higher than in November 2013. Total spending year-to-date was 5.7% above the January-November 2013 total.