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US production activity hits a peak of five months in September



A worker moves a roadster vehicle in Venice as a model at the Vanderhall Motor Works factory in Provo, Utah, September 25, 2018.

George Frey | Bloomberg | Getty Images

The US business sector rebounded slightly in September, according to IHS Markit.

The seasonally adjusted IHS Markit final US manufacturing procurement for purchasing executives hit 51.1 in September, the highest level in five months, and rebounded from 50.3 in August. Any reading above 50 shows an extension.

"News that PMI hits a five-month high gives a sigh of relief, but production is not out of the woods yet," said Chris Williamson, chief economist at IHS Markit in a statement. "The improvement in September fails to prevent US commodity producers from having suffered the worst quarter in a decade. Given these PMI figures, the production recession appears to have expanded into the third quarter."

A faster increase in production was a major driver for the sector, Markit noted. Development in production was the fastest since April after reports of slightly stronger customer demand and attempts to eliminate backlogs, says Markit.

Another gauge from the Institute for Supply Management showed that the sector was contracted in August, the first decline since 201

6, a sign that the US and China trade war is taking a slice of the economy.

The ISM PMI reading for September will be released on Tuesday at 10 AM. The sector is expected to rebound from the lowest August of 49.1% to 50.1%, according to Dow Jones.

This is news. Please check for updates.


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