Manufacturing growth slows, sending stock market higher

Monday, Dec. 1, 1997 | 9:35 a.m.

The assessment today from the National Association of Purchasing Management, energized the stock market, which had been hoping for signs that the economy was growing without overheating.

The Dow Jones industrial average was up more than 100 points shortly after the purchasing managers' report was released.

The trade group said its monthly index of business activity, compiled from interviews with corporate purchasing executives nationwide, fell to 54.4 percent from 56.0 percent in October.

The purchasing managers' report is widely followed by economists, including Federal Reserve Board Chairman Alan Greenspan, because it is usually the first indicator of how the economy fared in the previous month.

Any reading over 50 percent in the purchasing managers' index is a sign that manufacturing is growing.

The latest report also showed that while prices for some raw materials rose last month, overall inflation was down. The National Association of Purchasing Management's price index in November fell to 51.9 percent from October's 55.9.

Manufacturing employment was up during the month.

Norbert Ore, who heads the purchasing managers' survey committee, said manufacturing growth remains strong, although the rate of growth in new orders and production slowed.