NEW YORK (Reuters) - Manufacturing rebounded this month after hitting a one-year low in October and output grew at its fastest pace in nine months, an industry report showed on Thursday.
The overall pace of improvement in the goods-producing sector remained modest, though, and hiring in November slowed.
Financial data firm Markit said its “flash,” or preliminary, U.S. Manufacturing Purchasing Managers Index rose to 54.3, an eight-month high, from 51.8 in October. November’s reading comfortably beat economists’ estimate of 52.4.
Output grew at its fastest clip in nine months after nearly flat-lining in October. The subindex jumped to 57.1 from 50.6.
Respondents linked the rebound partly to the end of October’s partial government shutdown and a rise in demand from domestic and overseas customers.
Recent readings suggest the manufacturing output will grow 0.6 percent in the fourth quarter and 2.3 percent for the year, said Markit chief economist Chris Williamson.
But the employment subindex fell to 52.2 from 52.7, suggesting that “even (the current) pace of expansion is barely generating any employment growth,” Williamson said.
That, along with persistently low inflation, will likely leave the Federal Reserve in no rush to start scaling back stimulus until sometime in the new year, he added.
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.
Reporting By Steven C. Johnson; Editing by Chizu Nomiyama