US factory growth eases, no recession seen

The pace of growth in US manufacturing slowed last month, though improvement in October new orders suggested stable but slow growth for the US economy. While the survey from the Institute for Supply Management on Tuesday frustrated expectations for a pick-up in factory activity, analysts said the report bolstered views that the US economy would avoid another recession.
---- Construction spending rose
The index of national factory activity dipped to 50.8 in October from 51.6 the month before, missing expectations of 52.0. A number above 50 signals expansion. But in a positive sign, the ISM new orders index rose above 50 for the first time in four months, to 52.4 from 49.6, while the prices paid index fell to its lowest level since April 2009, to 41.0 from 56.0.
"There is no question that manufacturing activity has slowed a bit in response to the weakness that we are seeing out of Europe," said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina. The data came as the Federal Reserve began its two-day policy-setting meeting. The central bank's statement due on Wednesday may provide hints on how close it is to expanding asset purchases. Inventories fell to 46.7 from 52.0, while the employment gauge was relatively stable at 53.5 compared to 53.8 in September.
The nonfarm payrolls report is expected to show the sector added 1,000 jobs last month after losing 13,000 in September, according to Reuters data. The economy is expected to have gained 95,000 jobs overall, while the unemployment rate is seen steady at 9.1 percent.
In other US data on Tuesday, growth in US construction spending slowed in September as governments cut back on building and maintaining schools and public transportation, a government report showed. Total construction spending rose 0.2 percent to an annual rate of $787.21 billion, the Commerce Department said, shy of expectations for a gain of 0.3 percent. August's construction spending was upwardly revised to a gain of 1.6 percent.
Spending on public construction fell 0.6 percent in September, with cuts felt across government departments from healthcare and schools to public safety and conservation. Federal spending dropped 6.8 percent, its steepest decline since December. State and local outlays edged up 0.1 percent.
In the private sector, construction spending rose 0.6 percent, with residential spending up 0.9 percent and non-residential spending up 0.3 percent. Chrysler Group LLC posted a 27 percent gain in US sales last month, its best October figures in four years. General Motors Co posted a 2-percent sales gain last month, though it was a weaker rise than some analysts had expected.