U.S. Economy: Orders, Exports Propel Manufacturing

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http://www.bloomberg.com/apps/news?pid=20601068&sid=a4GGZoAPO0hY

Manufacturing in the U.S. expanded in November for a fourth consecutive month, propelled by gains in orders and exports that signal growth will be sustained.

The Institute for Supply Management’s manufacturing index fell to 53.6, lower than forecast, from October’s three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion. Another report showed home sales will probably rise further.

Stocks extended gains, sparked by a report showing factory output in China rose at the fastest pace in five years, lifting earnings prospects at U.S. exporters including Caterpillar Inc. Growing demand from overseas and lean inventories may keep American assembly lines running into 2010, when government stimulus efforts begin to wane.

“The overall economic recovery is in place,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in the ISM index. “Large manufacturing firms are probably picking up a lot of the stimulus infrastructure spending and are benefiting from global growth and the weaker dollar.”

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