U.S. factory activity loses momentum in September: Markit

NEW YORK Mon Sep 23, 2013 9:02am EDT

Workers assemble Motorola phones at the Flextronics plant that will be building the new Motorola smart phone ''MotoX'' in Fort Worth, Texas September 10, 2013. REUTERS/Mike Stone

Workers assemble Motorola phones at the Flextronics plant that will be building the new Motorola smart phone ''MotoX'' in Fort Worth, Texas September 10, 2013.

Credit: Reuters/Mike Stone

NEW YORK (Reuters) - U.S. manufacturing activity growth slowed in September as demand for products declined and firms took on fewer workers, an industry report showed on Monday.

Financial data firm Markit said its "flash," or preliminary, U.S. Manufacturing Purchasing Managers Index retreated to 52.8 this month from 53.1 in August. A reading above 50 indicates expansion.

Output growth accelerated to a six-month high of 55.3 from 52.5, but new order inflows from domestic and overseas customers slowed, suggesting "production growth is likely to weaken in the fourth quarter unless demand picks up again in October," said Chris Williamson, Markit's chief economist.

Firms took a cautious approach to hiring this month. The employment sub-index fell to 51.4, marking the slowest rate of job creation in three months. It stood at 53.1 in August.

The survey suggests growth momentum in the sector may be flagging and "vindicate(s) the Federal Reserve's decision to hold off on tapering its asset purchases," Williamson said.

Citing concerns about the economy's health, the Fed decided last week to carry on buying $85 billion of bonds each month to keep interest rates low and support growth. Investors expected the central bank to begin trimming those purchases this month.

The U.S. economy grew at a faster-than-expected 2.5 percent clip in the second quarter, but the Fed last week cut sharply its growth forecasts for the full year and for 2014.

Markit's "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed. A final reading will be released on the first business day of the following month.

A separate national manufacturing survey from the Institute for Supply Management, however, showed the sector grew in August it its fastest pace in more than two years as new orders rose.

ISM will release its survey for September on October 1.

(Reporting By Steven C. Johnson; Editing by Meredith Mazzilli)

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Comments (2)
nose2066 wrote:
So is there some connection between:
1. factory activity going down in the U.S. and
2. factory activity going up in China?

Sep 23, 2013 9:25am EDT  --  Report as abuse
AZreb wrote:
Manufacturing jobs – and construction – used to be the gateway to the middle class status in the US. Now we have had QEs and another one on the way and they evidently haven’t helped the manufacturing area.

Another QE just means that the economy is NOT supposed to improve greatly – maybe just marginally. We are still importing more than we export, especially importing from China.

If the Fed is not looking for greater improvement, even into 2014, then why are these so-called economists telling us that the economy is on the rise? I want some of their rose-colored glasses or some of their wacky-tobacky –

Sep 23, 2013 9:49am EDT  --  Report as abuse
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