U.S. factories ramped up activity in September, shaking off a one-month contraction in a sign America was resisting the downward pull of the sluggish global economy.
As Reuters reports, the Institute for Supply Management says today its index of national factory activity rose to 51.5 from 49.4 the prior month, beating analyst expectations in a Reuters poll. Levels above 50 indicate the sector is expanding.
“This is a relief,” says Ian Shepherdson, an economist at Pantheon Macroeconomics.
Factory output was a weak spot for the U.S. economy early in the year as a global slump weighed on American factories.
More recently, net exports added to economic growth in the second quarter and today’s report showed signs that factories’ future sales could increase, with the ISM index for new orders rising to 55.1 from 49.1 in August.
The dollar rose against a basket of currencies while Treasury yields also moved higher and U.S. stocks fell.
Manufacturing is grappling with the lingering effects of a strong dollar and lower oil prices. Economic growth is also listless in major U.S. trading partners in the European Union and Asia.
Activity in manufacturing, which accounts for 12% of the U.S. economy, has also been undercut by an inventory correction.
Another report today showed U.S. construction spending fell for the second straight month in August to its lowest level in eight months, an unexpected drop driven by weakness across public and private sectors, including in home building.
