U.S. factory activity back at three-and-a-half-year high, auto sales rise
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. manufacturing activity unexpectedly accelerated in October and automobile sales were strong, easing concerns of a significant moderation in economic growth in the fourth quarter.
The pick-up in manufacturing, which was driven by robust growth in new orders and production, suggested the economy was weathering a slowing of demand in major markets such as China and the euro zone. Factory activity is now back at the 3-1/2-year high first reached in August.
"The overall growth outlook remains very resilient as the underlying strength in domestic demand clearly outweighs potential external headwinds," said Harm Bandholz, chief U.S. economist at UniCredit Research.
The Institute for Supply Management said its index of national factory activity rose to 59 last month from 56.6 in September. The index is now within spitting distance of its cycle high of 59.3 reached in February 2011.
Any reading above 50 indicates an expansion in activity.
The improvement was broad-based, and the index topped even the most optimistic estimate on Wall Street. The gauge of export orders, however, slipped.
While U.S. manufacturing is gaining steam, factories across Asia and the euro zone are sputtering. Manufacturing activity hit a five-month low in China and continued to stagnate in the euro zone, separate reports showed.