The American manufacturing sector cooled off in September after the best monthly expansion in three and a half years as new business fell by the largest amount since January.
The purchasing managers index from the Institute for Supply management dropped to 56.6 from 59 in August well below the 58.5 median forecast. Reading from the survey of business executives have be rising steadily after falling to 51.3 in January and the August score was the second highest since the ned of the recession in June 2009, bettered only by 59.3 in February 2011.
Strong automobile sales and corporate investment have made up for relatively uninspired consumer spending and weak income growth.
In contrast the euro zone purchasing managers’ index for manufacturing in September fell to 50.3 from 50.5 in August with factory output contracting in Germany, France, Austria and Greece according to data from Markit Economics in London. This index has been declining since reaching 54.0, a three year high in January. Readings above 50 indicate expansion and below contractions.
A separate report from Markit reported that the manufacturing index for the United Kingdom was 51.6 in September, the weakest in 17 months, down from 52.2 the prior month and below the 52.7 estimate.
Chief Market Strategist
WorldWideMarkets Online Trading