Manufacturing figures boost US growth hope
HOPES for a healthy economic recovery were kept alive in the US yesterday as new data showed a manufacturing rebound in April, after two months of slowing growth.
Rising growth hopes also led Atlanta Fed president Dennis Lockhart to say he does not think more quantitative easing is needed.
Factory output accelerated in the month with the Institute for Supply Management’s (ISM) index rising from 53.4 to 54.8, firmly above the “no change” level of 50.
That takes the sector to a 10-month high and represents its 33rd consecutive month of growth, easing fears of another dip in economic growth.
The employment index rose from 56.1 to 57.3 as joblessness continued to fall, leading economists to forecast payroll growth of 175,000 for the month; and the production index rose from 58.3 to 61.
“The headline index is three per cent, which would be slightly better than the first quarter’s 2.2 per cent,” said Capital Economics’ Paul Dales.
“This survey will ease concerns that the softer tone of the incoming news in recent months marked the start of a renewed slowdown in growth similar to the one seen last year. We think the latest recovery is made of sterner stuff, although we doubt it will set the world alight.”
Meanwhile the positive sentiment spread to the motor industry, where GM upgraded its national industry sales forecasts to between 14m and 14.5m for 2012, up from previous predictions of 13.5m to 14m.
The Fed’s Dennis Lockhart said no new stimulus is needed