US manufacturing grew in December at its fastest rate in 6 months

Washington - There is a wary mood of mounting optimism over the U.S. economy. Its manufacturing sector advanced in December, showing improved figures for new orders, production, construction and employment.

The U.S. manufacturing sector flexed its muscle in December. The Institute for Supply Management, which released its main index of manufacturing activity today rose 53.9% in December, up from November's 52.7%. Analysts say any figure above 50 indicates an expansion of the economy, and could be augmented by Friday's release of the closely-watched U.S. non-farm payroll figures. Add to this, the Commerce Department reports that U.S.construction spending rose 1.2%, its sharpest increase since June 2010, as both residential and nonresidential housing showed advances. But the BBC spoke with Paul Dales, Senior US Economist at Capital Economics who says when you look at several factors, this is not the time to jump up and shout for joy about the overall economic outlook. "At face value, [the figures are] already consistent with annualised GDP growth of between 2.5% and 3%. This sits comfortably with other data suggesting that the economy is gaining traction. That all said, it is hard to see the US economy strengthening this year when the euro-zone is on the cusp of a potentially severe recession and when growth in Asia is set to slow. As such, 2012 will be another challenging year for the US economy, perhaps resulting in GDP growth of no more than 1.5%." The Washington Post reports that looking at some other economic indicators, the U.S. economy appears to have ended 2011 with a series of of upbeat indicators. The Department of Labor reports that unemployment fell to its lowest level in two-and-a-half years in November and the Conference Board Consumer Confidence says its Index rose almost 10 points to 64.5 in December, up from a revised 55.2 in November.