Tags: US | Economy

Economy Strengthens Behind Building, Manufacturing

Tuesday, 01 Jun 2010 12:11 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The economic recovery gained strength on the biggest rise in construction spending in nearly a decade and the 10th straight month of expansion for the manufacturing sector.

Temporary government incentives fueled most of the construction spending increases in April. Industry spending rose 2.7 percent with gains in all major sectors, the Commerce Department said Tuesday.

In a separate report Tuesday, the Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index dipped slightly in May. But the 59.7 reading was well above the 50 level that indicates expansion.

The news was welcomed on Wall Street. Stocks erased early losses after the reports signaled the lift in the economic recovery. The Dow Jones industrial average rose about 35 points in morning trading after sliding in early trading.

Construction spending was boosted by a homebuyer tax credit, which helped residential construction surge 4.4 percent in April. The tax credit expired at the end of April.

Government spending also rose on the strength of federal support. The 2.4 percent increase was aided by the economic stimulus program that Congress passed in February 2009. State and local spending jumped 2.3 percent and federal spending rose 2.9 percent.

The other major sector, nonresidential construction, climbed 1.7 percent. That marked the first advance in this category since March 2009. The strength in April came from gains in private sector work on communications projects and power generation facilities. Construction of office buildings and the category that includes shopping centers fell in April.

Commercial building projects have suffered in the weak economy through rising loan defaults and tighter credit. That has made it harder for developers to get financing.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the spike from the homebuyer tax credit is likely to fade now that it has expired.

He discounted the unexpected rise in nonresidential activity and said it could possibly be revised away next month.

"These numbers are hugely unreliable ... and we expect a downward revision next month," he said.

In the manufacturing report, the group's employment index, which measures employers' willingness to hire, rose 1.3 percentage points to 59.8. That was the highest level since May 2004.

New orders, a gauge of future production, were unchanged at 65.7. Export orders grew despite concerns about growth in Europe and Asia.

"We haven't lost much in the way of momentum," said Norbert Ore, chairman of the ISM's manufacturing survey on a conference call. "The manufacturing sector continues to move ahead."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Hackers Hit 25,000 Homeland Security Workers

Saturday, 23 Aug 2014 08:44 AM

The internal records of as many as 25,000 Homeland Security Department employees were exposed during a recent computer b . . .

Soros, Steyer, Bloomberg Donate Heavily to Super PACs in July

Friday, 22 Aug 2014 19:23 PM

Super PAC spending heated up in July in advance of the fall midterm elections, with Democrats dominating the list of meg . . .

Cop Who Pushed CNN Anchor in Ferguson Suspended Over Racist Speech

Friday, 22 Aug 2014 21:41 PM

A St. Louis County police officer who pushed back a CNN anchor during a live broadcast from Ferguson, Missouri, this wee . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved