Bucking fears of a sharp brake on growth after the government shutdown in the United States and earlier signs of distress in Europe and Asia, global manufacturing activity sped up in November, raising hopes for a broader global economic turnaround in the coming year.
In the U.S., figures released on Monday showed factories operating at the most robust pace since the spring of 2011, and well above the level economists had expected for the month. Separate surveys out Monday in Europe and China also offered encouraging signs in a sector often considered a bellwether for the global economy.
Experts attributed the rebound in the U.S. to demand from a recovering construction sector, as well as rising exports. Overseas, German factories helped push manufacturing in Europe forward, while China also showed unexpected strength.
“The news is a bit more encouraging when you look at advanced economies,” said Tal Shapsa, an international economist with Barclays. “The recovery is gradual and isn’t spectacular, but in an environment of fiscal headwinds, it looks good.”
That caution in the face of the better data extended to Wall Street, where stocks fell slightly Monday after rising more than 2 percent in the last month. For the year, however, the Standard & Poor’s 500 stock index was up more than 26 percent, reflecting a view in the markets that business remains on the upswing for large companies despite a series of blows from government cutbacks around the world.
The S&P 500 declined 4.91 points, or 0.3 percent, to 1,800.90. The Dow Jones industrial average dropped 77.64 points, or 0.5 percent, to close at 16,008.77. The Nasdaq composite index fell 14.63 points, or 0.4 percent, to 4,045.26.
In government bond trading, the price of the Treasury’s 10-year note fell 14/32, to 99 19/32, while its yield rose to 2.80 percent, from 2.75 percent late Friday.
If the recovery in the manufacturing sector reaches into the labor market and hiring picks up in the U.S., it could encourage the Federal Reserve to begin easing back on its stimulus efforts later this month or early next year.
After expectations that the central bank would begin this tapering earlier in the fall, policymakers wavered amid softer data and waited for more signals of stronger growth before cutting back on monthly bond purchases aimed at keeping interest rates low and encouraging more hiring of out-of-work Americans.
A stronger clue about the Fed’s course of action will come on Friday, when the Labor Department reports on job creation and unemployment for November. The data for October was significantly better than expected, despite the government shutdown, and the consensus among economists polled by Bloomberg is that the economy may have created about 180,000 new jobs in November, while the unemployment rate fell to 7.1 percent from 7.3 percent in October.