Alleviating concerns that the economic recovery would find it difficult to continue once the government stimulus was pulled away, manufacturing was on the rise in the U.S at a rate faster than what was expected in October.
Data from the Arizona based group Tempe highlighted that factory index for The Institute for Supply Management surged to 55.7, surpassing the expectations of economists and notching up a three-year high. Housing was also on the rise after seeing its worst slowdown since the 1930s. The Commerce Department’s figures showed an increase of 0.8 percent in spending on construction as well.
Amidst hope that the largest economy in the world is on its way recovery, stocks were on the up initially. Overseas sales are also expected to rise due to a global stimulus greater than $2 trillion and the dollar being cheap.
Manufacturing has been the driving force behind the economy getting back to growth in the previous quarter after four consecutive quarters of recession. But, unemployment continues to be a problem and is expected to have risen to 9.9 percent, the highest for 26 years, in a report due by the Labor Department on November 6.
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