The manufacturing and service sectors saw improved growth, at least by the gauge of the most recent Institute for Supply Management manufacturing and service sector indices. ISM's service sector index rose to 53.3 in August from July's 52.7 mark - an improvement few analysts were expecting. Its September manufacturing index rose a full percentage point to 51.6. Durable goods orders diminished in August, but not by much - just 0.1% overall. Core capital goods orders were up 1.1% and core capital goods shipments were up 2.8%.
In Washington, there were two big news items. President Obama unveiled the American Jobs Act - a bill that would cut the payroll tax for workers and businesses to 3.1% in 2012, offer tax credits as large as $4,000 to companies hiring the long-term unemployed, and devote about $80 billion into infrastructure projects. To pay for it, the President proposed $1.6 trillion in tax increases for upper-income Americans and corporations as a component of a $4.4 trillion reduction of the federal deficit by fiscal year 2021. Republicans dismissed any direct link between taxes on the wealthy and future job creation, and it remains to be seen if the AJA will pass in anything like its entirety.