Updated

U.S. manufacturing rebounded in September after contracting in August. New orders and production at factories increased, although employment fell — a sign that manufacturers have yet to fully stabilize after a difficult year.

The Institute for Supply Management says its manufacturing index rose to 51.5 in September from 49.4 in August. Any reading above 50 signals expansion.

U.S. factories have faced a brutal slowdown over the past year. The strong dollar made their goods less affordable overseas, hurting exports. Lower oil prices caused energy companies to cut back on orders of equipment and pipeline. Auto sales have also leveled off this year after reaching a record level in 2015.

A measure of employment was 49.7, its third straight month of decline. That is a sign manufacturers are laying off workers.