Reports paint mixed picture of U.S. manufacturing sector

The S&P Global U.S. Manufacturing PMI rose to 52.5 in October from a final reading of 52.0 in the prior month, slightly ahead of the 52.2 expected by economists, and remaining in expansionary territory. “U.S. manufacturers reported a solid start to the fourth quarter with production rising at an increased rate in response to an encouragingly robust jump in new orders,” commented Chris Williamson, chief business economist at S&P Global Market Intelligence. “However, lift the hood and the picture is not so healthy. Most worrying is the unprecedented rise in unsold stock reported in October, widely linked to weaker than anticipated sales to customers, especially in export markets, which could trigger a downshifting of production in the coming months unless demand revives. Companies have also become less optimistic about the year ahead, with sentiment back down close to the gloomy levels seen around the April tariff announcements.” A separate report from the Institution for Supply Management (ISM) found that manufacturing activity contracted last month. The ISM manufacturing PMI slipped to 48.7 in October after edging up to 49.1 in September. The production index dropped 2.8 points to 48.2, while the new orders index rose half a point to 49.4, and the employment index grew to 46, from 45.3 in September.