U.S. Manufacturing Index Increases More Than Expected In October
(RTTNews) - The Institute for Supply Management released a report on Monday showing its reading on U.S. manufacturing activity increased by more than expected in the month of October.
The ISM said its manufacturing PMI rose to 55.5 in October after edging down to 54.5 in September, with a reading above 50 indicating growth. Economists had expected the index to inch up to 54.6.
The bigger-than-expected rebound by the headline index partly reflected a notable increase by the production index, which shot up to 59.0 in October from 56.7 in September.
The new orders index also crept up to 55.5 in October from 55.3 in September, while the supplier deliveries index ticked up to 59.1 in October from 59.0 in September.
The ISM noted a supplier deliveries index reading above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.
Meanwhile, the report said the employment index slipped to 52.4 in October from 52.7 in September, although a reading above 50 still indicates job growth in the manufacturing sector for the fourth straight month.
The prices index also slid to 75.2 in October from 77.9 in September, indicating a slowdown in the pace of price growth.
"The report aligns with our forecast for a broadening industrial recovery," said Sara Godfrey, Associate U.S. Economist at Oxford Economics. "We expect that higher interest rates and rising energy costs will dampen, but not completely stamp out, this recovery."
On Wednesday, the ISM is scheduled to release a separate report on service sector activity in the month of October. The services PMI is expected to edge down to 54.7 in October after dipping to 54.9 in September.
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