Election fears get the better of US manufacturers as output stumbles
The US manufacturing industry is growing at one of its slowest paces in two years, according to new data out this afternoon.
The news comes as the world's largest economy approaches both the hotly-anticipated US Presidential Election and the next interest rate rise from the Federal Reserve.
The manufacturing sector scored 51.5 on the closely-watched Markit purchasing managers' index (PMI) for the month of September, where scores above 50 indicate growth. The figure was a three-month low, but is a marked downturn on readings throughout 2014 and much of 2015.
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"Manufacturing growth slowed to a crawl in September, suggesting the economy is stuck in a soft-patch amid widespread uncertainty in the lead-up to the presidential election," said Chris Williamson, chief business economist at IHS Markit.
In the face of the strong dollar, which has appreciated against both the pound and the euro since the beginning of the summer, manufacturing exports dropped over the month for the first time since May.
Williamson added: "Any growth is largely being driven by the consumer, in turn helped by tailwinds of low interest rates, low inflation and a solid labour market. Business spending, in contrast, is being subdued by the headwinds of uncertainty about the economic outlook."
The US economy has hit a number of speed bumps over the course of this year. The UK's referendum on EU membership caused considerable uncertainty ahead of the summer, and may have played a role in delaying Janet Yellen from advocating a hike in interest rates before June. She was then knocked off course after some volatile jobs figures left many scratching their heads over the true strength of the jobs market, while weak GDP figures for both the first and second quarter have prompted forecasters to question whether the economy's recovery could be reaching its final stages.