US manufacturing has dipped slightly this month in line with the Federal Reserve’s forecast of “modest” US growth in coming months.
The Institute for Supply Management’s factory index fell to 54.5 from 56.3 in August, according to the median of 63 forecasts in a Bloomberg survey.
Household purchases rose 0.4 percent last month, the same as in July, according to Commerce Department figures.
Companies such as Cisco Systems Inc are seeing a “bumpy” recovery that will limit gains in business investment and hiring, restraining the manufacturing rebound that helped the US recover from the worst recession since the 1930s.
A jobless rate hovering close to 10 per cent is shaking consumer confidence and shackling spending, the biggest part of the economy.
“The manufacturing sector is still reasonably healthy, but it’s certainly decelerated,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “We need to see a pickup in hiring to drive faster income growth and lead to acceleration in consumer spending,” or else “we’re doomed to this sub-par growth,” he said.