American Manufacturing Bounces Back

U.S. factory activity unexpectedly expanded last month after three straight months of contraction, according to the Tempe, Ariz.-based Institute for Supply Management.

ISM's manufacturing activity index rose to 51.5 in September from 49.6 in August. A reading above 50 indicates expansion. Nine of the index's 10 factors improved. Only inventories worsened.

The institute says its gauge of new orders climbed 11% to a fourth-month high, and its employment reading posted the biggest gain since October 2009. Measures of production, export demand, prices and order backlogs also advanced.