US manufacturing sector activity expanded in September for the second consecutive month, and the overall economy grew for the fifth consecutive month, the nation's supply executives said in the latest Manufacturing US Institute of Supply Management Report, which was issued today. However, the pace of the expansion eased.

Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee commented:"The manufacturing sector grew for the second consecutive month in September. While the rate of growth moderated slightly when compared to August, the recovery broadened as the number of industries reporting growth increased from 11 to 13. Both new orders and production are growing, but at a slower rate when compared to August. It appears the fundamentals for continuing recovery are still at work as inventories and sales are gaining balance. This month, we asked a special question with regard to the American Recovery and Reinvestment Act. Twelve of the 18 manufacturing industries expect to derive some benefit from the program, and 12 manufacturing industries responded that they expect their companies to see some benefit."

In September, 13 of the 18 manufacturing industries reported growth. The industries - - listed in order - - are: Wood Products; Paper Products; Apparel, Leather & Allied Products; Transportation Equipment; Textile Mills; Printing & Related Support Activities; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products. The four industries reporting contraction in September are: Primary Metals; Furniture & Related Products; Plastics & Rubber Products; and Machinery.

The recovery in manufacturing continues as the PMI (Purchasing Managers' Index) registered 52.6 % in September, which is 0.3% point lower than the 52.9% reported in August, and the second month of expansion following 18 months of decline. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.2%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the fifth consecutive month in the overall economy, as well as expansion in the manufacturing sector for the second consecutive month since January 2008. Ore said: "The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (43.3%) corresponds to a 0.7% increase in real gross domestic product (GDP). However, if the PMI for September (52.6%) is annualized, it corresponds to a 3.6% increase in real GDP annually."

In other US data, American consumer spending rose 1.3% in August, the biggest rise since June 2005, triggered by back-to-school spending and the government car-rebate program. Income gains were a just 0.2%.The savings rate fell. Separately, initial weekly claims for jobless benefits rose 17,000 to 551,000 last week. Continuing claims -- those covering workers for more than one week -- fell by 70,000 to 6.1 million in the week ended Sept. 19th.

American consumer spending rose 1.3% in August -- savings rate fell; Weekly jobless claims rose

US pending sales of second-hand homes rose sharply in August, for a seventh consecutive month , reaching the highest since March 2007, data from the National Association of Realtors showed today.

A separate government report showed US construction unexpectedly rose at its fastest pace in nearly a year in August, with investment in private residential construction posting its biggest increase in almost 16 years.

The NAR's Pending Home Sales Index, which tracks contracts signed, rose 6.4% to 103.8, the longest consecutive month-on-month rise n the history of the series, which began in 2001.

The index rose from a reading of 97.6 in July and is 12.4% above August 2008's level of 104.5.

NAR senior economist Lawrence Yun said not all contracts are turning into closed sales within an expected timeframe.

"The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,"he said.

The Commerce Department said today that spending on construction projects rose 0.8% --  the biggest increase since September 2008, after a revised 1.1% dip in July that was previously reported as a 0.2% decline.

German retail sales

The German federal statistics office, Destatis, reported today that retail turnover in August 2009 in Germany decreased 3.5% in nominal terms and 2.6% in real terms compared with the corresponding month in the previous year. The number of days open for sale was 26 in August 2009 and in August 2008 too.
 
After seasonal adjustment, turnover in August was in nominal terms 0.7% and in real terms 1.5% smaller than that of the preceding month.
 
Compared with the corresponding period of the previous year, retail turnover in the first eight months 2009  was in nominal terms 2.4% and in real terms 2.0% smaller.

Irish local radio news agency

INN - - Independent Network News - - the news agency which provides news feeds to local Irish radio stations, has been hit by the advertising slump and is expected to announce the closure of its service this afternoon.

INN employs around 16 people and supplies national and international news to Ireland's independent local radio stations.

The Broadcasting Commission of Ireland, requires local radio to provide 20% of its output in news and the possible closure of INN will create problems for individual stations.

US markets

Stocks fell at the beginning of the fourth quarter Thursday after the mixed economic reports reported on above.

The Dow Jones Industrial Average dropped 103 points at 9608; the S&P 500 fell 1.2% and the Nasdaq Composite slid 1.6%.

Live US indices

Eurozone unemployment rate rose to 9.6% in August 2009; Lowest in Netherlands 3.5%; Highest in Spain 18.9%; Ireland at 12.5%

Eurozone Manufacturing PMI in September signals sector is close to returning to growth after 16 months of contraction

In Europe, the Dow Jones Stoxx 600 is down just over 1%.

Irish Consumer Sentiment improved in September

In Dublin, the ISEQ is up 0.09%.

AIB is up 1.75% and Elan is down over 2%.

European Benchmarks

Irish Share Prices

Euribor Rates

Oil

On the New York Mercantile Exchange, oil for November delivery is trading at $70.48 down 13 cents from Wednesday's close. In London, Brent crude  for November delivery is trading at $68.80 a barrel.

Currencies

The euro is trading  at $1.4549 and at £0.9109.

For live currency updates, check the right-hand column of the Finfacts home page.  The dollar traded at a record low $1.6038 per euro on July 15, 2008.