U.S. manufacturing contracted in November for the first time in three years as the sector buckled under the weight of a strong dollar and deep spending cuts by energy firms, but robust automobile sales suggested the economy remained on solid ground.
Other data on Tuesday showed a sturdy increase in construction spending in October, which should help to offset the drag from manufacturing on fourth-quarter growth. With manufacturing accounting for only 12 percent of the economy, analysts say it is unlikely the persistent weakness will deter the Federal Reserve from raising interest rates this month.
“Manufacturing is being pummeled by the stronger dollar and the weakness of global demand, but the other 88 percent of the economy continues to perform well. This won’t prevent the Fed from raising interest rates at the mid-December meeting,” said Steve Murphy, a U.S. economist at Capital Economics in Toronto.
http://www.reuters.com/article/2015/12/01/us-usa-economy-idUSKBN0TK51M20151201#Z3xF4zD8exyvyYVY.97
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