U.S. manufacturing unexpectedly accelerated in January at the fastest pace since May 2004, reinforcing signs of strength in the expansion at the beginning of the year.
The Institute for Supply Management's factory index increased to 60.8 from 58.5 in December, the Tempe, Arizona- based group said. Readings greater than 50 signal growth, and economists projected a decline to 58. Orders surged to a seven-year high, and a measure of factory employment jumped to the highest level since 1973.
Stocks rose and Treasuries fell as the figures, combined with manufacturing growth in Europe and China, underscore an improving global economy.
"Businesses have figured out the economic recovery has legs so they're growing more confident about expanding production and new orders and increasing hiring," said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina.
