U.S. Factory Activity Grew Faster Than Expected in October, With Production at Its Highest Since November 2021, ISM Says

American manufacturers grew faster than forecast in October, according to the Institute for Supply Management and a Breitbart report by John Carney.

The headline. ISM said Monday that its manufacturing purchasing managers index rose to 55.5 from 54.5 in September, the second-highest reading in more than four years. Breitbart says it beat all but one forecast in a Bloomberg survey of economists. A reading above 50 means expansion, and manufacturing has now expanded for 10 straight months.

Production and orders. The production index climbed 2.3 points to 59, its highest since November 2021. New orders edged up to 55.5 from 55.3, the strongest since July and a tenth month of growth.

Prices and jobs. ISM's prices index fell 2.7 points to 75.2, so cost increases were less widespread than in September, though the reading is still high. The employment index was 52.4, down slightly from 52.7 but above 50 for a fourth month in a row, the longest run of manufacturing job growth since early 2022.

How broad it was. Twelve industries reported growth, including electrical equipment, machinery, computers and electronics, primary metals and transportation equipment. Three shrank: printing, paper and nonmetallic mineral products. Five of the six largest manufacturing industries grew. Manufacturers' inventories returned to growth at 51.4 from 48.6, while ISM says customers' inventories remain too low, which can support future production. Export orders rose to 51.2 from 50.9, and imports rose to 52.9 from 51.

What to keep in mind. These are survey-based indexes of business sentiment and activity, not measures of output in dollars. The prices index at 75.2 means cost pressure has not gone away. We did not independently check the figures against ISM's release. Our earlier Economy coverage includes the Small Business Administration's lending claims.