The September Manufacturing ISM (Institute for Supply Management) Report on Business showed the 100th consecutive month of growth for the overall economy and the 13th consecutive month of growth in the manufacturing sector with only the Furniture & Related Products industry showing a contraction. Prices paid for raw materials increased for all industries and are at their highest level since May 2011, with survey respondents expressing uncertainty over the effects of the aftermath of Hurricane Harvey. Faster growth was seen for new orders, production, employment, producer inventories, order backlog and new export orders, while growth slowed for imports. Supplier deliveries slowed for the 17th straight month, and customer inventories continued at low levels.

Exports rose +$0.8 billion and imports dropped -$0.4 billion in August, narrowing the trade deficit by -$1.2 billion to $42.4 billion. For the year to date the deficit is up +8.8% compared to the same period last year, with a +$114.0 billion (+6.4%) increase in imports outpacing an +84.9 billion (+5.8%) increase in exports. Goods exports increased for pharmaceutical preparations (+$0.6 billion) and telecommunications equipment (+$0.4 billion), and dropped for fuel oil (-$0.7 billion) and foods (-$0.4 billion). Goods imports increased for passenger cars (+$0.5 billion), and dropped for industrial supplies (-$0.5 billion), computer accessories (-$0.3 billion), and civilian aircraft (-$0.2 billion).

September's Bureau of Labor Statistics (BLS) Employment Situation report showed a -0.2% drop in unemployment to 4.2%, and a +0.2% increase in the workforce participation rate to 63.1%. Government payrolls were up +7,000, but private payrolls dropped by -40,000, and the BLS stated that a sharp decline in employment for restaurant workers and below trend growth in other industries was likely due to the effects of Hurricanes Irma and Harvey. Average hourly earnings were up +0.5% M/M (+2.9% Y/Y), with August’s hourly earnings revised upward by +0.1% to +0.2% M/M, and revised upward by +0.2% to +2.7% Y/Y.