ISM manufacturing index hits highest level since 2004 in September
Growth in the US economy's manufacturing sector unexpectedly improved in September, according to data from the US Institute for Supply Management.
The ISM's headline manufacturing index rose to 60.8 from 58.8 in August, beating consensus expectations for a reading of 58.1 and marking the highest reading since June 2004.
Growth was driven by new orders, the index for which jumped to 64.6 from 60.3 in August. Meanwhile the employment index printed at 60.3 compared to 59.9 the month before and the production index increased to 62.2 from 61.0.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The hurricanes appear not to have made a material difference to activity at the national level, though the press release cites businesses in several sectors fretting about potential supply chain disruptions and higher prices.
"For now, though, this is a very strong report, consistent with our view that the rates hikes in Dec, Mar, and Jun have not dampened activity at all. Indeed, by signalling clearly that the Fed believes the economy is strong, the initial tightening might be encouraging firms to invest rather than remain hunkered down."
Andrew Hunter, US economist at Capital Economics, said the rise in the ISM manufacturing index is the latest illustration of the benefit to the manufacturing sector from the weaker dollar and strong global demand.
"The index is now, at face value, consistent with GDP growth surging above 5% annualised in the second half of this year," he said.