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US manufacturing growth continues apace in September: Markit

The U.S. manufacturing sector expanded in September, matching the previous month's growth rate, which had been the fastest in more than four years, while employment levels among goods producers rose to a two-and-a-half-year high, an industry report showed on Tuesday.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index was unchanged from August's reading of 57.9, the highest since April 2010. Economists polled by Reuters expected it to edge up to 58.

A reading above 50 signals expansion in economic activity.


An employee uses a mig welder to create a welding beed on the inside seem of a Pioneer coal stove at the Leisure Line Stove Co. facility in Berwick, Pennsylvania.
Ty Wright | Bloomberg | Getty Images
An employee uses a mig welder to create a welding beed on the inside seem of a Pioneer coal stove at the Leisure Line Stove Co. facility in Berwick, Pennsylvania.

The employment subindex rose for a second straight month, climbing to 56.6 from 54.6 in August. It was the strongest reading of labor conditions in the manufacturing sector since March 2012.

"The flash PMI signaled another month of impressive growth of the U.S. manufacturing economy. The third quarter as a whole has seen the strongest expansion since the sector began to recover from the financial crisis," said Chris Williamson, chief economist at Markit, adding that he expects manufacturing to add to third-quarter U.S. gross domestic product growth.

"We expect GDP to grow at an annualized rate of at least 3 percent and as much as 4 percent, depending to a large extent on how the vast services economy fared in September," Williamson said.

Markit's gauge of new orders held steady above the 60 level for the third time in the past four months, indicating persistent demand for manufactured goods.

Markit's "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed.