US Manufacturing Activity Falls to Lowest Level Since July 2023
US manufacturing activity shrank in October for a seventh month to the lowest reading since July 2023, as two hurricanes may have limited production in parts of the Southeast.
The Institute for Supply Management’s factory gauge fell to 46.5, data out Friday showed. A reading below 50 indicates contraction.
Production activity also dropped sharply, to 46.2, marking the biggest monthly decline since April 2021.
Two measures of orders and employment remained in contraction territory, but both improved somewhat. The ISM manufacturing employment index rose to 44.4 in October, the fifth month under 50. New orders increased one point to 47.1.
Bureau of Labor Statistics data released Friday show that 512,000 people in nonagricultural jobs were unable to work due to inclement weather in October. Another 1,409,000 people who usually work full-time could only find part-time work due to the weather.
Manufacturing employment decreased by 46,000 in October, reflecting a decline of 44,000 in transportation equipment manufacturing that was largely due to strike activity, according to BLS figures. The 46,000 decline was the most since April 2020.
Overall, manufacturing activity has been contracting every month expect one in the past two years.
Data out Thursday showed that the Federal Reserve’s preferred measure of underlying inflation accelerated in September, bolstering the case for a slower pace of interest-rate cuts following the 50-basis-point reduction at the central bank's last meeting.
The ISM report also showed inventories shrank to the lowest level since June 2012, suggesting producers are keeping stockpiles lean.
Source: Bloomberg
