Construction and Manufacturing Slow, Measure of Inflation Decelerates

- Construction Spending for November rose .2% versus estimates of a .7% increase and a .8% gain in October.
- ISM Manufacturing for December fell to 54.2 versus estimates of 57.5 and a reading of 58.1 in November.
- ISM Prices Paid for December fell to 63.0 versus estimates of 68.7 and a reading of 74.0 in November.

BOTTOM LINE: US construction spending rose less than forecast in November as homebuilding declined for the first time in five months, Bloomberg reported. However, nonresidential construction spending gained .5% in November. I expect construction spending to remain healthy over the intermediate-term as commercial building and hurricane rebuilding accelerates.

US manufacturing growth slowed in December after expanding at the fastest pace of the year in the months following the Gulf Coast hurricanes, Bloomberg said. The new orders component of the index fell to 55.5 from 59.8 the prior month. The employment component of the index dropped to 52.7 from 56.6 in November. Manufacturing slowed from torrid rates in October and November to healthy rates in December. I continue to believe manufacturing will add to US growth over the intermediate-term as demand remains healthy and inventories are rebuilt.