December ISM Index Hits 57.0, Beating Prediction

The overall economy grew for the 20th straight time, while the manufacturing sector expanded for the 17th time, the Institute for Supply Management reported Monday.

According to the ISM’s monthly report on business, the index crept up to 57.0 in December from 56.6 in November.

Economists predicted the index would rise to 56.9.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.

“The manufacturing sector continued its growth trend as indicated by this month’s report,” said Norbert Ore, chairman of the Institute of Supply Management’s manufacturing business survey committee.

“We saw significant recovery for much of the U.S. manufacturing sector in 2010. The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle,” he said.

“Additionally, manufacturers that export have benefitted from both global demand and the weaker dollar,” Ore added. “December’s strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.”

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