Washington, DC, United States (4E) – Manufacturing activity in the U.S. surprisingly expanded in September and hiring prospects improved, according to Institute for Supply Management (ISM) data released Tuesday.
The ISM factory index jumped to 56.2, the highest reading since April 2011, from 55.7 in August, according to the Tempe, Arizona-based group’s report released Tuesday.
The median estimate of 84 economists surveyed by Bloomberg News called for a decline of the ISM index to 55, and estimates ranged from 52.4 to 57.2.
A reading above 50 shows expansion in manufacturing activity, while a reading below marks contraction. Manufacturing contributes around 12 percent to the U.S. economy.
The ISM PMI has climbed in the last three months. ISM’s Bradley Holcomb said that the gain shows the strength of U.S. manufacturing, putting it in a good position for continued growth.
The report also shows that the gauge for production and employment accelerated at a faster rate. While the measure for orders cooled, it posted two straight months of above 60 readings, the first time in more than two years.
In a separate report Tuesday, data provider Markit released its final U.S. September PMI, which declined to 52.8, the lowest reading in three months. Like the ISM index, a Markit reading of over 50 suggests expansion, and below 50 indicates contraction.