NEW YORK (REUTERS) - United States manufacturing ended the year on a high note, growing in December at its fastest pace in 11 months, while the rate of job growth was the swiftest since March, an industry report showed on Thursday.

Financial data firm Markit said its final US Manufacturing Purchasing Managers Index rose to 55.0 last month, beating November's 54.7 reading and an initial December estimate of 54.4. A reading above 50 indicates expansion.

A solid increase in output, for which the index rose to its highest mark in 21 months of 57.5 from 57.4 in November, boosted growth in the sector and increased demand for plants and machinery.

"This tells us that business spending is picking up on the back of rising confidence, which adds to the sense that the recovery is (becoming) more self-sustaining," said Markit chief economist Chris Williamson.

The pace of hiring increased, with the employment sub-index rising to 54.0, its best showing in nine months, from 52.3 in November. Mr Williamson said the index suggests manufacturing jobs are being created at a rate of about 20,000 per month.

Signs of strength in both the manufacturing and services sector as well as stronger job growth across the economy contributed to the Federal Reserve's decision in December to begin slowing its monthly bond purchases. That program, which the Fed began 15 months ago, was designed to keep long-term interest rates low and boost hiring and growth.