The Mercury News Weekend

Economy shows gains in latest reports

MANUFACTUR­ING, CONSTRUCTI­ON, CONSUMER DATA UP

- By Aleksandrs Rozens Associated Press

NEW YORK — Manufactur­ing expanded in November in industries ranging from apparel to tobacco, a widely watched survey showed Thursday, and other reports painted a picture of a U.S. economy gaining strength.

The government reported that personal income and spending edged up in October, constructi­on spending rose that month and fewer Americans applied for unemployme­nt insurance last week — all signs of a surprising resilience after one of the worst hurricane seasons on record.

‘‘Energy pricing is still a concern,’’ said Tom Kopanski, vice president of automation at Siemens Energy and Automation, an Atlanta unit of the German electronic­s giant Siemens. But ‘‘we are seeing a good level of confidence there. If you look at different (business) segments, our customers are telling us the demand is there.’’

Kopanski said his company, which makes electronic­s for metal-cutting tools used by car and aircraft makers as well as technology for bottlers, has seen demand increase, suggesting consumers are still willing to spend.

Kopanski’s optimism was shared by other business executives surveyed by the Institute for Supply Management, which said its manufactur­ing index stood at 58.1 last month. While that is down slightly from October’s reading of 59.1, any reading above 50 indicates the sector is expanding. November marked the 30th consecutiv­e month of growth in the manufactur­ing segment.

The top industries reporting growth in November included apparel, rubber and plastics, electronic components and equipment, tobacco and textiles.

Even prices proved less worrisome to manufactur­ers last month, despite concerns about energy costs, as the survey’s prices index dropped to 74.0 from 84.0.

The Commerce Department reported that personal spending rose 0.2 percent in October, down from September’s 0.5 percent gain but better than the 0.5 percent decrease in August when the Gulf Coast region was hit by hurricane Katrina. Incomes rose 0.4 percent in October after being skewed for two months by the storm’s fallout.

Also Thursday, the Labor Department said first-time jobless claims fell by 17,000 last week to 320,000 and the four-week moving average of claims is now close to a level where it was prior to the hurricanes.

‘‘This is a sign the economy has weathered the shock of the hurricanes with flying colors,’’ said Joe Lavorgna, chief U.S. economist at Deutsche Bank, who is forecastin­g that the holiday shopping season for retailers will be better than expected.

In other economic news, the Commerce Department said that constructi­on spending rose 0.7 percent in October to an all-time high of $1.13 trillion at a seasonally adjusted annual rate.

That followed a more modest 0.2 percent September increase, and was propelled by gains in residentia­l and public constructi­on, both of which rose to record highs. Building activity may slow in coming months, however, as rising mortgage rates dampen the red-hot housing market.

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