Manufacturing in the USA up the most since June 2011: Bloomberg
Manufacturing in U.S. Grew in February by Most Since June 2011
Manufacturing in the U.S. expanded at a faster pace than forecast in February, reaching the highest level since June 2011 as factories boosted production to meet greater demand.
The Institute for Supply Management’s factory index advanced to 54.2 last month from 53.1 in January, the Tempe, Arizona-based group said today. The figures exceeded the most optimistic forecast in a Bloomberg survey in which the median projection was 52.5. A reading greater than 50 signals expansion.
March 1 (Bloomberg) -- U.S. household purchases, which account for about 70 percent of the economy, climbed 0.2 percent in January after a 0.1 percent gain the prior month, a Commerce Department report showed today in Washington. Incomes slumped 3.6 percent, sending the saving rate down to the lowest level since November 2007. Betty Liu and Michael McKee report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Orders expanded the most in almost two years, the report showed, as manufacturers such as Applied Materials Inc. (AMAT) emerged from an industry setback in the second half of 2012. Further production gains would complement a rebound in the housing market and help underpin the economy amid budget disputes in Washington.
“Things are starting to improve for manufacturing, and the improvements are starting to build on each other,” Michael Montgomery, a U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Inventory growth has turned the corner. Orders have picked up finally.”
“When you get decent orders, decent production, an inventory correction that’s complete and backlogs picking up, you’ve got the recipe for a period of much better growth,” he said.
Estimates for the ISM index from the 81 economists surveyed ranged from 50.5 to 54. The gauge averaged 51.7 in
... but when you look behind the numbers, private-sector infrastrucuture spending and capital expenditures that are comeasurate with the increase in manufacturing activity are significantly lagging.
In today's economy, a company would rather add on an extra shift to more fully utilize the floor space he has and forgo any expansion of floor space. The reason is because there is no confidence that any surge in orders will continue when the expansion is borne out of un-sustainable monetary and deficit-financed stimulus and NOT out of any real incentives for business to favor the American economic environment over other geographies.
There's no question that if you stuff a $Trillion more dollars into people's pockets than you take out of them (deficits) and print money so profusely that the fed funds rate remains planted at 0% interest and the 10 year treasiury yields just 1.87%...
... that you're going to generate SOME kind of factory orders and spending in the economy... just like you would if you ran up your credit card without a job to pay it off at month's end.