Friday, November 1, 2013

ISM Manufacturing Increased in October

The ISM Manufacturing Index increased in October to 56.4, above expectations. The index is at its highest level since 2011 with five straight months of improvement. The manufacturing industry appeared to be little phased by the government shutdown in October.

The details of the report are favorable. Production saw a slight decline, losing 0.2 points and settling at 60.8. Production is still well in the expansionary territory. New orders improved, rising 0.1 points to 60.6. The inventory index also improved, rising to 52.5. The gap between inventories and new orders, a proxy for future production, shrank to 8.1. However, the wide gap still indicates future improvement in manufacturing.

Trade indicators improved as well, with new export orders rising to 52.0 from 57.0.

The employment index deteriorated from 55.4 to 53.2. Despite the deterioration, employment continues to grow as the index remains above its neutral threshold of 50.

Read the ISM release.

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