April 26, 2012
Business activity in the US held
near a 10-month high in March, showing the economy is weathering
rising fuel costs.
The Institute for Supply Management-Chicago Inc. said today
its barometer fell to 62.2 from 64 in February. Readings greater
than 50 signal growth. Economists forecast the gauge would fall
to 63, according to the median of 58 estimates in a Bloomberg
The strongest auto sales since 2008 combined with growing
business investment in new equipment may keep propelling demand
throughout all manufacturing industries, which account for about
12 percent of the economy. Increasing sales will probably also
continue to underpin hiring, extending the biggest payroll gains
“Output and hiring should remain robust,” Joel Naroff,
president of Naroff Economic Advisors Inc. in Holland,
Pennsylvania, said before the report. “Manufacturing has been
strong, with order books continuing to fill.”
Economists’ projections in the Bloomberg survey ranged from
59.7 to 67.
Consumer spending in the US rose in February by the most
in seven months, a Commerce Department report showed today,
signaling the biggest part of the economy is strengthening.
Purchases climbed 0.8 percent, the largest gain since July.
The median estimate of economists surveyed by Bloomberg News
called for a 0.6 percent increase. Incomes advanced less than
projected, sending the saving rate to a more than two-year low.
Stocks rose, extending the Standard amp; Poor’s 500 Index’s
biggest first-quarter advance since 1998.
The Samp;P 500 increased 0.3 percent to 1,406.72 at 10:11 am
New York time. The benchmark gauge has rallied 12 percent since
the beginning of 2012, gaining for a second straight quarter.
The Chicago group’s employment measure slid to 56.3 from
64.2 the prior month. The production gauge increased to 68.6,
the highest since last April, from 67.8, and the index of new
orders decreased to 63.3 from 69.2.
The measure of prices paid climbed to 70.1 from 65.6, and a
gauge of inventories rose to 57.4 from 49.6.
Economists watch the Chicago index and other regional
manufacturing reports for an early reading on the national
outlook. The Chicago group says its membership includes both
manufacturers and service providers with operations in the US
and abroad, making the gauge a measure of overall growth.
The ISM’s national factory index probably rose to 53.1 in
March from 52.4 the prior month, according to the median
projection in a Bloomberg survey ahead of the group’s report
April 2. As in the Chicago survey, a reading greater than 50
Other regional measures have been mixed this month. Data
from the Federal Reserve Banks of Philadelphia and New York
showed manufacturing expanded at a faster pace in March. Similar
gauges from Dallas and Richmond pointed to a slowdown.
Nike Inc. (NKE), the world’s largest sporting-goods company, is
among companies seeing improving demand.
The Beaverton, Oregon-based company this month reported
third-quarter profit that topped analysts’ estimates as sales
gained in North America. The maker of Air Jordan basketball
shoes has been using new products to lure consumers who are
spending more on athletic gear across the industry. The strategy
helped boost Nike’s third-quarter sales 17 percent to $2.15
billion in North America, the company’s largest market.
“There is some stability easing back into the broader
marketplace as consumer confidence moves higher in some parts of
the world,” Nike Chief Executive Officer Mark G. Parker said in
a March 22 conference call.
That may explain why factories are hiring. Manufacturing
payrolls climbed by 83,000 workers in the first two months of
2012, the best performance over a similar period in a year,
according to data from the Labor Department.
Vehicle demand should also drive production at the nation’s
auto plants. Cars and light trucks sold at a 15 million annual
rate last month, the most since 2008, according to Ward’s
Growing demand shows that higher fuel costs have yet to
damage consumer spending, which accounts for about 70 percent of
the economy. The price of a gallon of regular unleaded gasoline
climbed to a 10-month high of $3.93 on March 29, according to
AAA, the nation’s largest automobile association.
The Bloomberg Consumer Comfort Index last week held close
to a four-year high, a report yesterday showed.
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Carlos Torres in Washington at
To contact the editor responsible for this story:
Christopher Wellisz at