This month, manufacturing ended its weakest three months in over three years. In addition, new claims by Americans for jobless benefits remained close to highs of two months last week, which suggested that the recovery of the economic is still not gaining much traction.
The Purchasing Managers Index remained at 51.5 for September, which is unchanged from the month of August. Any reading that is above 50 shows expansion. For the third quarter, the index had an average of 51.5, down from the average of 54.2 for the second quarter of this year and was the worst rate since the third quarter in 2009. At 51.5, the component output rate was the lowest since September of 2009.
One economist said with output growing at its slowest rate since the beginning of the recovery, manufacturing might have acted to drag down the economy slightly during the third quarter. The economy grew at an annual rate of 1.7% during the second quarter, but likely slipped near stagnation in the third quarter, added the economist.
In a separate report released by the Department of Labor in the U.S., initial unemployment claims last week edged down by only 3,000 to a seasonally adjusted amount of 382,000. A spike in unemployment claims two weeks ago was attributed to Tropical Storm Isaac, said economists, but the small minuscule improvement last week pointed to an overall fundamental weakness in the economy.
The best measure of trends in the labor market is the four-week moving average of new claims. That increased by 2,000 to over 377,750, which is the highest rate since June and was the fifth straight weekly increase for the measure.
