Cheer as US economy shows its resilience

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A gauge of US factory activity held near a two-and-a-half-year high in December and the number of Americans filing new claims for jobless benefits fell for a second week last week, pointing to resilience in the economy.

Other data on Thursday showed construction spending hit its highest level in nearly five years in November.

The Institute for Supply Management (ISM) said its index of national factory activity stood at 57.0 last month from November’s two-and-a-half-year high of 57.3.

Readings above 50 indicate expansion. Still, December’s result was the second highest reading in 2013.

“Sentiment is improving. This is all very positive. We are looking for growth to pick up once again in the new year,” said Scott Brown, chief economist with Raymond James in St Petersburg, Florida.

In a separate report, the Labor Department said initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 339,000.

Although claims continue to be plagued by seasonal fluctuations, economists said last week’s decline was consistent with an improvement in labour market conditions and was in line with other indicators showing an acceleration in job growth.

A gauge of employment in the ISM survey touched its highest level since June 2011.

“Jobless claims remain at a 
level consistent with improving labour market conditions. We continue to expect a 215,000 increase in nonfarm payrolls for December,” said Laura Rosner, a US economist at BNP Paribas in New York