US ISM Manufacturing PMI improces to 55.5 in October vs. 54.6 expected

Business activity in the United States (US) manufacturing sector expanded at an accelerating pace in October, with the Institute for Supply Management's Manufacturing Purchasing Managers' Index (PMI) improving to 55.5 in October from 54.5 in September. This print came in better than the market expectation of 54.6.

Other details of the report showed that the Employment Index edged lower to 52.4 in this period, while the Prices Paid Index, the inflation component, declined to 75.2 from 77.9.

Assessing the report's findings, "in October, US manufacturing activity remained in expansion territory. Of the five subindexes that make up the PMI, four (New Orders, Production, Supplier Deliveries and Inventories) grew faster than the previous month, while Employment growth slowed down by 0.3 percentage point," noted Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.

"In October, general sentiment got worse for a third month in a row, with 34 percent of the comments positive and 66 percent negative (a 1-to-2 ratio of positive to negative sentiment)," Spence added. "Among negative comments, pricing volatility was mentioned in 62 percent, longer lead times 41 percent, tariffs 25 percent and the Iran war 21 percent; most comments mentioned multiple factors."

Market reaction

This report failed to trigger a noticeable market reaction. At the time of press, the US Dollar Index was down 0.35% on the day at 101.60.