ISM Manufacturing Index Surpasses Economists' Predictions; Construction Spending Hits New 7 Month Low
January 5, 2010 - The ISM Manufacturing Index grew at its fastest pace since April 2006, the Institute of Supply Management in Tempe, Arizona reported yesterday. In its fifth consecutive expansion, the index rose to 55.9 % from the 53.6 % recorded in November.
These results are likely to keep interest rates flat for the week, while possibly even edging them a bit higher. Overall, the report suggests that a recovery is now edging into motion.
Though the ISM brought exceptional news, construction spending for November was down for the seventh straight month. Hitting its lowest point since July 2003, construction projects fell 0.6 %, reaching 900.1 billion for the month.
Despite the November's decline, the recent extension of the tax credit for first-time home buyers, there is hope that sales will improve construction spending into 2010.