US manufacturing is still at a two-year low

US manufacturing may have been lukewarm again in September.

The latest flash reading of the purchasing manager’s index (PMI) from Markit Economics was 53, unchanged at a 22-month low. But above 50, manufacturing is still in expansion, not contraction.

Markit chief economist Chris Williamson noted the index survey showed that manufacturing growth was at the weakest level in nearly two years, and that was likely to be a drag on third-quarter growth.

“Manufacturing remained stuck in crawler gear in September, fighting an uphill battle against the stronger dollar, slumping demand in many export markets and reduced capital spending, especially by the energy sector,” Williamson said in the release.

New work orders increased at the slowest pace since January 2014, and employment rose at a slower rate.

Economists had estimated a flash Purchasing Manager’s Index reading of 52.8.

Here’s the latest chart of the index:

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