Manufacturing expanded at the best rate in two and a half years in September, adding positive momentum to the economy heading into the fourth quarter.
The purchasing managers’ index from the Institute for Supply Management rose to 56.2 last month from 55.7 the month before, the strongest reading since April 2011. The median estimate of economists in the Bloomberg survey was 55.0.
Automobile production and building and construction goods have kept orders flowing to factories with general consumer items growing at a much slower pace.
The average age of the U.S. car fleet is among the highest on record as people put off replacing their cars in the aftermath of the recession and subsequent tepid recovery. Car and light truck sales reached 16 million annualized in August, the fastest sales since November 2007.
The component indexes in the ISM report were mixed. Production rose to 62.6 in September form 62.4 and employment climbed to 55.4 from 53.3, the best reading since last June. But new orders fell to 60.5 from 63.2, expert order dropped to 52.0 from 55.5 and imports sank to 55.0 from58.0.
Chief Market Strategist