Manufacturing Sector Growth Continues Amid Strong Demand as Inflationary Pressures Persist, 2 Surveys Show

01:57 PM EDT, 10/01/2026 (MT Newswires) -- The US manufacturing sector continued to expand in September amid robust demand and growth in employment, though inflationary pressures remained a key concern, two separate surveys showed Thursday. The Institute for Supply Management's purchasing managers' index edged down to 54.5 last month from 54.6 in August, but marked the ninth straight month of expansion. The consensus was for a 55 print in a Bloomberg poll. A reading above 50 indicates the manufacturing sector is generally expanding. The new orders index rose to 55.3 in September from 53.7 the month prior -- also marking a ninth consecutive monthly expansion -- while production dropped to 56.7 from 58.3. The employment measure increased to 52.7 from 51.2, according to the ISM survey. "The manufacturing expansion remains intact, but did not accelerate in September," TD Economics Senior Economist Vikram Rai said in a note. "Stronger orders and backlogs, firmer employment and low customer inventories should support near-term production, but softer output growth, trade flows and respondent sentiment temper the signal." The prices gauge jumped to 77.9 last month from 71.1 in August, hovering near the levels last seen at the start of the US-Iran war, the ISM said. "The sharp jump in prices is the clearest concern," Rai said. "Tariffs, metals costs, energy disruption and constrained supply are keeping goods inflation elevated, complicating the inflation outlook and limiting the scope for (Federal Reserve) rate cuts." Separately, S&P Global (SPGI) said its manufacturing PMI rose to 55.9 in September from 53.9 the month prior, reaching its highest level since May 2022. Output and new orders accelerated on strong domestic demand, despite worsening supply chain delays and weaker export orders amid tariffs and elevated shipping costs. The net increase in jobs was the highest in more than five years, while input-price inflation accelerated further due to tariffs, high energy prices, and supply shortages, according to the data provider. Overall sentiment in the business ahead remained positive in September, with manufacturers confident that the recent upswings in production and new orders can be sustained, the S&P survey showed. "While sending an encouraging signal for further growth of manufacturing capacity in the coming months, the indication that demand is outstripping supply also means inflationary pressures remain a key area of concern, especially amid high oil prices," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "The combination of accelerating growth, increased hiring and elevated price gauges will add to speculation of a further imminent rate hike from the (Federal Open Market Committee)." Markets are currently pricing in a 73% probability that the Fed will leave its benchmark lending rate unchanged later this month, according to the CME FedWatch tool. The remaining odds are in favor of a second consecutive 25-basis-point hike, as the central bank seeks to curb hot inflation. Price: 389.11, Change: -5.36, Percent Change: -1.36