01 February 2012 at 15:18 GMT
The January report on ISM Manufacturing missed expectations slightly coming in at 54.1 vs. 54.5 while December was revised down to 53.1 from 53.9. Despite the miss it is the highest level since June 2011 when the index read 55.8 and we are encouraged by the components of the report.
Production declined to 55.7 from 58.9, but new orders rose to 57.6 from 54.8 signalling further improvement in the coming months. Backlog of orders and supplier deliveries also rose - the former from contraction. Employment also continues to signal robust growth in manufacturing job growth even though it eased to 54.3 from 54.8.
Bottom line: a solid report with better components than headline suggests.
Construction spending for December was also released showing a large gain of 1.5 percent month-on-month vs. expectations of 0.5 percent. However, November's gain was revised down from 1.2 percent to 0.4 percent.