The Institute for Supply Management said its manufacturing index jumped to 58.4 per cent in January from 54.9 per cent in December, topping analysts' estimates.

This brought the index to its highest level since August 2004. "This month, 13 of 18 industries reported growth, up from nine industries last month, and this is a good indication that the impact of the recovery is expanding," said Norbert Ore of the Institute for Supply Management

Earlier on Monday, the Commerce Department reported that personal income rose by more than expected, climbing 0.4 per cent in December, while personal spending rose by 0.2 per cent, less than economists had predicted.

US construction spending on the other hand fell in December much more than expected, reflecting commercial real estate weakness and uncertainty over a government subsidy. Spending declined 1.2 per cent, at a seasonally adjusted annual rate of $902.55 billion compared to the prior month, the Commerce Department said.