U.S. factory activity grows at fastest pace in two years

U.S. factory activity expanded last month at the fastest pace in two years, an encouraging sign that manufacturing could lift economic growth and hiring in the coming months.

The Institute for Supply Management, a trade group of purchasing managers, said Tuesday that its manufacturing index rose in September to 56.2, the highest since April 2011. That’s up from 55.7 in August and the fourth straight increase in the index. A reading above 50 indicates growth.

Manufacturers added jobs last month at the fastest pace in more than a year and ramped up production, the survey showed. They also received new orders at a healthy pace, though slower than in August.

U.S. factories are showing signs of picking up after slumping earlier this year. A modest recovery in housing and strong auto sales are pushing up demand for steel and other metals, auto parts, furniture and appliances.

Limited supply fuels climb in prices of U.S. homes

U.S. home prices climbed 12.4 percent in August from a year ago, fueled by more buyers bidding on a limited supply of houses.

Real estate provider CoreLogic says prices also increased 0.9 percent in August from July. But the gain was half the 1.8 percent increase in July from June. The group said higher mortgage rates and the end of the summer buying season likely slowed the gains.

Prices rose in every state compared with the previous year, and in 99 of the 100 largest cities. Akron, Ohio was the only area to report a decline.

Mortgage rates have risen about a full percentage point since May. Some analysts worry that higher rates could slow home sales.

Merck to reduce global work force by 8,500 more

Drugmaker Merck says it plans to reduce its global work force by another 8,500 jobs as part of a plan to cut its annual costs by about $2.5 billion by the end of 2015.

The latest work force reductions come on top of about 7,500 in previously announced job cuts. The two rounds of cuts means it is slashing about 20 percent of its work force currently at about 81,000 people.

Merck & Co. says the cost cuts will allow it to better target its investments on the areas with the most potential for returns.

Amazon to set to hire 70,000 seasonal workers

Amazon.com says it is hiring 70,000 full-time seasonal workers around the U.S. to fill orders during the holiday season. The world’s largest online retailer says the hires are an increase of 40 percent over last year’s 50,000 workers.