New figures show that the US manufacturing sector grew in August after 18 consecutive monthly falls.
The Institute of Supply Management said its index of the factory sector, also known as the purchasing managers' index, jumped to 52.9 from 48.9 in July. Any number above 50 indicates growth. The figure was stronger than the average economist estimate of 50.5.
'The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July,' said ISM survey chief Norbert Ore.
'While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth,' he added.
Scrappage scheme boosts US car sales
US car sales boomed in August as consumers burned through $3 billion in government incentives.
Ford reported a 17% monthly sales gain and the success of the US government's 'cash for clunkers' trade-in incentives stoked expectations that industry-wide monthly sales could see the first gain since October 2007.
The now-exhausted US scheme, which was inspired by similar moves European markets, drove a rush to dealerships in late July and the first three weeks of August.
More than 690,000 vehicles were scrapped in the United States for taxpayer-funded credits of up to $4,500 as consumers took advantage to drop petrol-guzzling trucks and SUVs.
The biggest winners in the US sales bonanza were major Asian car makers and Ford, which benefited from a stronger line-up of smaller cars.
Ford, the only US car maker to avoid a federally sponsored bankruptcy, posted its second consecutive monthly sales gain and said signs of a recovery in truck demand pointed toward a broader recovery in the economy.
But Chrysler saw a 15% fall in August. The company, now under control of Italy's Fiat, lost potential sales when dealers ran short on some models after it shut down all of its production during a bankruptcy process that ended in June.
