Newspaper article THE JOURNAL RECORD

Purchasing Index Marks Expansion

Newspaper article THE JOURNAL RECORD

Purchasing Index Marks Expansion

Article excerpt

NEW YORK (AP) _ American manufacturing expanded for the second straight month in November and boosted the overall economy to the healthiest level since May, corporate purchasing managers said Tuesday in a widely followed survey.

The National Association of Purchasing Management's monthly report showed emphatic gains in production and new orders among a broad range of U.S. industries, from plastics to electronic gear. It also showed a decrease in the pace of layoffs that have ravaged the workforce in recent months.

The report coincided with other signs that the economy is in a sustainable recovery from recession after some false starts over the past few years.

Economists said it was premature to conclude that American manufacturers will begin aggressively fattening their workforces again. But they said the purchasing manager survey results suggested unemployment, historically the lagging indicator in a recovery, could begin to show a turnaround.

"I think the numbers tell you the economy has definitely stabilized," said Kathleen Stephansen, senior economist at Donaldson, Lufkin Jenrette Securities Corp. in New York. "It's taken away the risk on the downside, that maybe you'll have a stall, like a triple dip or quadruple dip."

The purchasing management group's monthly index of economic activity rose to 55 percent, a big jump from the 50.6 percent level of October and 49 percent of September.

The index is calculated using responses from purchasing executives at more than 300 U.S. industrial companies on questions ranging from employment to prices to new orders. The information is closely watched by economists because it offers some of the freshest evidence on the economy's stamina and direction.

An index reading that exceeds 50 percent indicates the manufacturing economy is generally expanding, while a reading below 50 percent indicates the manufacturing economy is shrinking.

A reading that exceeds 44.5 percent over many months generally indicates an expansion of the overall economy. …

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