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The numbers: A barometer of business conditions at American factories contracted in September for the 11th month in a row, but there were signs of improvement and many companies even added workers.
The Institute for Supply Management’s manufacturing survey rose to 49.0% last month from 47.8% in August. It was the third straight increase and the index matched a 10-month high.
Still, the index has been negative for 11 months in a row for the first time since the 2007-2009 Great Recession. Numbers below 50% signal contraction.
Economists polled by the Wall Street Journal had forecast the index to register 48%.
Key details:
- The index of new orders rose 2.4 points to 49.2%. So far the auto strike has had little impact.
- The production barometer increased 2.5 points to 52.5% and was positive for the second month in a row.
- The employment gauge climbed 2.7 points to 51.2%.
- The prices index, a measure of inflation, fell 4.6 points to a fairly low 43.8%. Yet survey Chairman Timothy Fiore said inflation pressures are likely to intensify because of higher oil prices.
Big picture: After a period of malaise, there are signs of stirring in the industrial side of the economy. Heavy industry represents about 10% of gross domestic product.
Yet a sustained acceleration in growth is unlikely soon, especially with oil prices rising again and adding upward pressure to inflation.
Looking ahead: “We’re in a trough and looking for signs of growth,” Fiore said in a conference call with reporters.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
fell in Monday trades.
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