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Business Digest: U.S. factories grow at fastest pace since 2014


ECONOMY

U.S. factories grow at fastest pace since 2014

WASHINGTON — American factories expanded in February at the fastest pace in more than two years.

The Institute for Supply Management, a trade group of purchasing managers, said Wednesday that its manufacturing index came in at 57.7 last month, up from 56 in January and highest since October 2014. Any reading above 50 signals growth.

Factories have now expanded for six straight months. New orders, production and export orders grew faster. Hiring grew, but at a slower pace than it did in January.

Seventeen of 18 manufacturing industries reported growth in February.

American factories have bounced back after being hurt in early 2016 and late 2015 by cutbacks in the energy industry, a reaction to low oil prices and a strong dollar, which makes U.S. products costlier in foreign markets.

ECONOMY

Consumer spending up slightly, inflation at 4-year high

WASHINGTON — U.S. consumer spending rose at only a sluggish pace in January, even as signs of growing optimism about the economy have emerged.

Consumer spending increased 0.2 percent in January, after a 0.5 percent gain in December, the Commerce Department said Wednesday. Spending on services — from haircuts to health care — was flat, and Americans spent less on long-lasting goods such as autos and appliances.

Prices also rose in a sign that inflation has perked up a bit. A measure of inflation closely watched by the Federal Reserve rose 0.4 percent in January and has increased 1.9 percent in the past 12 months. That’s the biggest year-over-year gain in more than four years.

That nearly matches the Fed’s target of 2 percent and may make a rate hike by the Fed more likely in the coming months.

FAST FOOD

McDonald’s lays out plan to lure back customers

McDonald’s acknowledged that it lost 500 million customer transactions in the U.S. since 2012 and laid out plans to get more people back into its restaurants — including by offering more tempting value deals, and the option to order and pay on mobile phones by the end of the year.

The world’s biggest burger chain said Wednesday during its investor day in Chicago that it had lost some of its customer visits to other major fast-food chains, rather than to newer rivals. To reverse the declines, it said it will also more aggressively market coffee and pastries and that it is looking to expand delivery in major markets such as the U.S.

McDonald’s outlined its plans after having recorded its fourth straight year of declining guest counts at established U.S. locations in 2016, despite the fanfare over the rollout of an all-day breakfast menu. The company also trimmed its domestic store base for the second year in a row.

In addition to letting customers order on their phones, McDonald’s noted it is transforming restaurants to incorporate ordering kiosks and table service.

OIL & GAS

New CEO says Exxon will boost production

Exxon’s new CEO says the company will increase production and has a mix of projects to handle any level of oil and gas prices.

Darren Woods also said at a meeting with investors that Exxon Mobil Corp. is committed to increase its dividend and will buy back shares when the company has extra cash.

Woods rose to Exxon’s top job two months ago after his predecessor, Rex Tillerson, was tapped by then-President-elect Donald Trump to become secretary of state. The investor meeting is Woods’ first public event as CEO.

Wall Street is concerned about slow growth and falling profits at Exxon. To allay those concerns, Woods said the company will boost production 2 percent a year from 2016 through 2020.

Woods said drilling in Texas’ Permian Basin and in North Dakota will help boost short-term production, while big projects around the world will add to long-term growth.



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