U.S. Business Activity Unexpectedly Rises as Manufacturers Lead Recovery

Source: Bloomberg

Sept. 30 (Bloomberg) -- Business activity in the U.S. unexpectedly accelerated in September, a sign manufacturers are still at the forefront of the recovery.

The Institute for Supply Management-Chicago Inc. said today its business barometer climbed to 60.4 in September, exceeding the highest estimate of economists surveyed by Bloomberg News, from 56.7 the prior month. Figures greater than 50 signal expansion. The median forecast projected the gauge would fall 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Companies are boosting orders for manufactured goods as they replace outdated equipment and rebuild inventory in line with gains in consumer spending, while demand from overseas is bearing up.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 manufacturing sector is far from dead and buried,” said David Semmens, an economist at Standard Chartered Bank in New York. “The pickup in new orders and production will postpone fears about double dip in manufacturing for now.”

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the developed economies.