(Reuters) – A gauge of U.S. factory activity hit a 2-1/2-year high in November and construction spending increased solidly in October, brightening the economic outlook as the year winds down.

Monday’s reports were the latest indication the economy was gaining strength despite the fiscal headwinds and could bring the Federal Reserve a step closer to scaling back its massive monetary stimulus.

“The economy is moving forward at a moderate to strong pace,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. “This is additional evidence that the economic outlook is positive enough and expected to continue long enough and that the Fed might actually taper in December.”  Read more