Manufacturing in U.S. Expands Unexpectedly as Orders Rise
By Michelle Jamrisko - Oct 1, 2012 11:47 AM ET
Manufacturing in the U.S. unexpectedly expanded in September, indicating the industry is stabilizing after three months of contraction.
The Institute for Supply Management’s factory index rose to 51.5 last month from 49.6 in August, the Tempe, Arizona-based group said today. Economists in a Bloomberg survey projected a September reading of 49.7, according to the median forecast. Measures above 50 represent expansion.
Stocks extended gains after the figures showed American factories are holding up in the face of a global economic slowdown that’s weakened manufacturing from Asia to Europe. At the same time, a further strengthening among U.S. producers may prove difficult as cutbacks in household spending and limited investment remain persistent headwinds for companies such as Caterpillar Inc.
“This report removes some of the concern that manufacturing is contracting,” even though “we’re definitely seeing slower growth,” said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, who projected a reading of 50.2. The “details look pretty good. Overall, we’re looking at economic growth that’s moderate but not enough to bring down the unemployment rate significantly.”
Estimates for the index from the 76 economists surveyed ranged from 48 to 51.2. A reading above 42.5 generally indicates an expansion in the overall economy, the ISM has said. The gauge averaged 55.2 in 2011 and 57.3 a year earlier.
The Standard & Poor’s 500 Index climbed 1 percent to 1,454.78 at 10:30 a.m. in New York.
more:
http://www.bloomberg.com/news/2012-10-01/ism-index-of-u-s-manufacturing-increased-to-51-5-in-september.html
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