US October Manufacturing PMI at 54.9 Misses Forecast

U.S. manufacturing purchasing managers’ index data for October came in below market expectations.

The U.S. manufacturing PMI released on November 2 was 54.9. That was below both the market forecast of 56.0 and the previous reading of 56.0.

Still, the index remained above 50, the threshold separating expansion from contraction, indicating that manufacturing activity stayed in expansion territory.

By contrast, the Institute for Supply Management’s October manufacturing PMI came in at 55.5, above the market forecast of 54.5. The previous reading was also 54.5. Both indicators remained above 50, the line dividing expansion from contraction.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said U.S. manufacturing maintained strong expansion in October and posted its best growth trend since early 2022.

Demand for artificial intelligence-related goods and equipment remained strong, but supply-chain disruptions were preventing companies from keeping up, he said. Delivery delays also widened to their most broad-based level since 2022.

Williamson said manufacturers were passing higher energy-related costs on to customers as demand outpaced supply. As a result, the rate of increase in factory selling prices in October was the highest since September 2022.

“Rising factory gate prices could feed into consumer inflation in the coming months,” he said. “If inflation continues to run above the Federal Reserve’s target, pressure for additional rate increases could build.”