The Hill (10/1, Needham) “On The Money” blog reported manufacturing expanded last month at the fastest pace in 2 1/2 years, the Institute for Supply Management reported on Tuesday.
The ISM’s manufacturing index rose to 56.2 in September from 55.7 in August. The improvement may indicate that hiring could increase. The employment index climbed to 55.4 percent versus the previous month’s reading of 53.3 percent. That is the highest reading this year.
Chad Moutray the chief economist for In the National Association of Manufacturers’s Shopfloor (10/2) blog, Chief Economist Chad Moutray wrote, “This would be good news if true, particularly with manufacturers adding just 20,000 additional workers over the past year and several other reports, including the NAM/IndustryWeek Survey of Manufacturers, indicating only modest growth at best in terms of hiring.”
The production index rose by 0.2 percentage point to 62.6 percent. The Hill also noted that after “contracting in May, the index has posted three months of 60-plus readings.” Moutray said, “The larger story is the progress acceleration in activity over the course of the past few months, with relatively strong growth in production and new orders.”
He also said, “Overall, manufacturers wrapped up a pretty decent third quarter in terms of output and sales.” However, with the shutdown of the Federal government, he said “that continued fiscal stalemates will only hurt the prospect of more robust economic growth.” Moutray said, “Fiscal uncertainty is likely to limit economic growth — at least in the short-term — and we continue to see growth rates for manufacturing that, while better than in the spring, are still not as robust as we might like.”
Bloomberg News (10/1, Smialek), the AP (10/2, Rugaber), IndustryWeek (10/2), Reuters (10/2) and other media sources also cover the story.
Markit Factory Index Falls In September. Bloomberg News (10/2, Schenkel) reports manufacturing activity in the US grew at its slowest pace in three months in last month, Markit said. The Markit Economics final index of manufacturing fell to 52.8 last month from 53.1 in August.
Reuters (10/2) reports demand from other nations declined which slowed the overall rate of new orders and suggesting last month’s increase in output may be temporary.
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