October US ISM Manufacturing PMI rises to 55.5, exceeding the 54.6 forecast

US manufacturing growth gathered momentum in October, as the Institute for Supply Management's Manufacturing Purchasing Managers' Index (PMI) rose from September's 54.5 to 55.5 in October. The reading exceeded the market forecast of 54.6, signalling a faster expansion in business activity across the United States (US) manufacturing sector.

Elsewhere in the report, the inflation component, the Prices Paid Index, fell from 77.9 to 75.2. The Employment Index also eased during the period, reaching 52.4.

Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, offered this assessment of the 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,"

"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 further observed. "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."

How did markets respond?

Markets showed no discernible response to the report. The US Dollar Index stood at 101.60 at the time of publication, down 0.35% on the day.