Rising output buoys growth in US
BUSINESS activity in the US unexpectedly accelerated in September according to data released yesterday, confirming that manufacturers are still at the forefront of the country's fragile recovery.
The Institute for Supply Management-Chicago. said its business barometer climbed to 60.4 in September from 56.7 the prior month, exceeding economists' expectations. Figures greater than 50 signal expansion. The median forecast projected the gauge would actually have fallen to 55.5.
Companies are boosting orders for manufactured goods as they replace outdated equipment and rebuild inventory in line with gains in consumer spending, while demand from overseas is bearing up. The figures may ease concern at the Federal Reserve, which last week cited a slowdown in business investment in announcing it stood ready to take additional measures to spur the economy.
The world's largest economy grew at a 1.7pc annual rate in Q2, marking the start of a slowdown in growth that had concerned the Fed, according to revised figures. (Bloomberg) from the Commerce Department. The increase in gross domestic product (GDP) compares with a 1.6pc estimate issued last month. GDP grew 3.7pc in the first three months of the year and 5pc at the end of 2009.
President Barack Obama this month proposed a package of $180bn in business tax breaks and infrastructure spending to boost spending and job growth.
"We continue to see what we believe to be a slow-growth economy, but still a growth economy," Charles Moorman, chief executive of shipping firm Norfolk Southern Corporation said.