Manufacturing Cools as Factories Settle Into More Sustainable Expansion
Manufacturing cooled in September following the strongest rate of growth in three years as U.S. factories settled into a more sustainable expansion that will spur the economy.
While the Institute for Supply Management’s index dropped to 56.6 from 59 in August, the gauge’s average over the past three months was the highest since early 2011, figures from the Tempe, Arizona-based group showed.
The median forecast in a Bloomberg News survey of 84 economists called for a decline to 58.5.
“It’s signaling a fairly good pace of manufacturing growth,” said Michael Moran, chief economist at Daiwa Capital Markets America, who projected a drop in the index. “The labor market is improving at a respectable pace. The economy is expanding at a moderate pace.”
Economists’ estimates in the Bloomberg survey for the U.S. ISM gauge ranged from 57 to 60. Readings greater than 50 indicate growth.
The group’s factory employment measure decreased to 54.6 in September, from 58.1 a month earlier.
The new orders gauge declined to 60 last month from a 66.7 reading that was the highest since 2004.
The ISM measure of production advanced to 64.6, the highest since May 2010, from 64.5 the prior month. The index for orders waiting to be filled decreased to 47 from 52.5.
Measures of factory and customer inventories fell from a month, while an index of prices paid climbed.
