US Manufacturing PMI Declines to 16-Month Low

In October, the ISM Manufacturing PMI fell to 46.5, marking a contraction at a faster rate and the lowest reading since July 2023. This decline, down from 47.2 in September, indicates that the manufacturing sector has contracted for seven consecutive months amid subdued demand and uncertainty about federal monetary policy. Key components revealed mixed results, with the new orders index slightly increasing to 47.1, while the production index sharply dropped to 46.2. Employment showed marginal improvement, rising to 44.4, despite a reported loss of 47,000 manufacturing jobs due to strikes. The prices index surged to 54.8, suggesting rising cost pressures, while respondents expressed concerns about trade policies and overall economic pessimism. The report reflects ongoing challenges in the manufacturing sector as companies remain hesitant to invest in capital and inventory amidst economic uncertainties.