The Federal Reserve raised US interest rates last night to their highest level in four years, while signalling that it still has headroom to take them higher.
It did so amid news that American factories were running at a brisk pace in October while chilly weather and Halloween shopping helped keep US retail sales rising, boding well for overall consumer spending.
Against that, the US motor industry reported sharp declines in vehicle sales as high fuel prices deterred Americans from buying new cars and trucks.
The US central bank's interest-setting committee raised rates for the 12th time in a row by a quarter point, to 4.00 per cent, in line with market expectations. It warned that high energy costs could add to inflationary pressures, although longer-term inflation expectations are still contained.
The Fed described its monetary policy as "accommodative", suggesting it has room to raise rates further. But it also re-stated its intention to do so at a " measured" pace.
The US Institute for Supply Management said its index of manufacturing edged down to 59.1 in October, a slightly slower growth pace than September's 59.4, but still confirming that US manufacturing remains robust.
New orders and production continued to expand and employment grew, but the index for input prices jumped to 84 from 78 in September, driven by rocketing energy costs.
In a separate report, the US Census Bureau said construction spending rose by 0.5 per cent in September to a record $1.120 trillion, after a 0.4 per cent increase in August.
General Motors reported a 22.7 per cent drop in its October US vehicle sales compared with October last year ago, the third consecutive monthly drop. Ford reported a 23.1 per cent fall.