Manufacturing in the US stayed in contraction territory last month, edging slightly higher from the September print but missing expectations while a separate reading on the sector also moved higher.
The Institute for Supply Management’s purchasing managers’ index was up 0.5 percentage point to 48.3% in October, but shy of the Econoday consensus for 49.3%. A reading above 50% indicates the economy is expanding, while below that level signals a contraction.
New orders rose to 49.1% from 47.3% in September, while employment was up 1.4 points to 47.7%. Prices slowed by 4.2 points to 45.5% while the imports index was down 2.8 points to 45.3%.
“The PMI contracted for the third straight month, but at slower levels compared to September,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee.
Separately, the IHS Markit US Manufacturing PMI rose to 51.3 for October from 51.1 a month earlier, the highest headline figure since April.
“Tentative signs of renewed vigor are appearing in the US manufacturing sector, with the survey’s production gauge having now risen for three successive months to suggest that the soft patch bottomed out in July,” said Chris Williamson, chief business economist at IHS Markit.
New order growth was at a six-month high while employment rose at the quickest pace since May, IHS Markit said. Still, the overall rate of growth was “well below” the average for the series over the long run, IHS Markit said.
“While the outlook has improved, further growth is by no means assured,” Williamson said. “Survey respondents continue to report widespread concerns over issues such as tariffs, the auto sector’s ongoing malaise, a lack of pricing power amid weak demand and uncertainty about the economic and political situation over the coming year.”