New demand boosts manufacturing sector; construction drops on weaker housing demand.
Activity at the nation's factories picked up toward the end of 2006, boosting growth in the manufacturing sector, while homebuilders continued to struggle with a weaker housing market. Here's a look at this week's economic developments and how they may impact your business.
New Orders Pick Up
Following sharp declines in October, activity at U.S. factories picked up in November, driven by a higher demand for durable goods, the Commerce Department reported Thursday.
New orders in November rose by 0.9 percent to $394.3 billion after dropping by 4.5 percent the previous month, the report said.
Orders for durable goods, which have grown in three of the last four months, rose by 1.6 percent to $213.8 billion, while non-durables inched up to $180.5 billion, the report said.
Manufacturing shipments inched up 0.2 percent to $209.5 billion, and inventories climbed 0.3 percent to $294.6 billion, the report said.
At the current pace, the ratio of inventory to shipments was 1.24 months, a slight increase over 1.23 months in October, the report said.
Overall, the nation's manufacturing sector grew at a faster rate in December following a slowdown in November, the Institute for Supply Management reported Wednesday.
The Tempe, Ariz.-based trade group's monthly manufacturing index rose 1.9 points in December to 51.4 percent, driven by new orders for apparel, petroleum, and printing products, among other goods. Results above 50 in the monthly index, which is based on a national survey of the purchasing and supply managers, indicate growth.
Service-Sector Growth Slows
At the same time, growth in the nation's service sector eased up in December, the group said in a separate report Thursday.
Based on a similar survey of purchasing and supply managers in the non-manufacturing sector, the ISM services index for December fell 1.8 points to 57.1 percent.
Top performing industries for the month including real estate, rental and leasing outfits, and finance and insurance, the group said.
Construction Spending Down
Facing a downturn in the housing market, the nation's builders spent 0.2 percent less in November than the previous month on construction projects nationwide, the Commerce Department reported on Wednesday.
The declines, which pushed spending for the month to a seasonally adjusted annual rate of $1.184 billion, were driven by a 1.6 percent decrease in spending on private housing projects, the report said.
Yet, despite the downturn total construction spending in November was up 0.1 percent from the same period last year, the report said.
Jobless Claims Rising
New claims for unemployment benefits rose by 10,000 to 329,000 in the week ending Dec. 30, the Labor Department said Thursday.
The advance seasonally adjusted insured unemployment rate over the previous week was unchanged at 1.9 percent, the report said.
The largest increases in new claims were in Indiana, Pennsylvania, and Kentucky, while claims fell in Tennessee, New York, and North Carolina.