Factory Growth Eases in January

U.S. factory output grew more slowly in January as companies received fewer orders, although managers did show a renewed willingness to hire.

The Institute for Supply Management said Tuesday that its index of national manufacturing activity slipped to 56.4 in January from 57.3 in December, below forecasts for 57.

“The manufacturing sector hit a bump in the road,” said Anthony Chan, chief economist at Banc One Investment Advisors.

The sector was still expanding, however, as denoted by a 20th straight month of readings above 50. And in a sign that a sector long-plagued by tough job conditions is seeing more employment creation, the labor market index jumped to 58.1 from 53.3.

The jobs component fueled hopes that the government’s employment report for January, due out Friday, might offer a pleasant surprise on the labor market.

Another bright spot Tuesday was a U.S. government report showing a bigger-than-expected rise in construction spending in December. The increase was enough to possibly lift fourth-quarter economic growth above initial estimates.

The 1.1% jump in construction spending amounted to a record $1.03 trillion annual rate, compared with an upwardly revised $1.02 trillion in November, the Commerce Department said.