Manufacturing Expands at Fastest Rate in 25 Months on New Orders Growth
- The Institute for Supply Management® reported that the manufacturing sector expanded in October at the fastest pace since September 2018, with the sector continuing to rebound from COVID-19-related weaknesses in the spring. The data were buoyed by robust growth in new orders, which rose at rates not seen since January 2004. With that said, there are also hints at lingering supply chain disruptions in the ISM despite solid progress since April in these data.
- New orders for manufactured goods rose 1.1% in September, increasing for the fifth straight month. Despite recent progress, new factory orders have fallen 3.9% year-over-year, due largely to severe COVID-19 disruptions in March and April. More encouragingly, core capital goods spending—a proxy for capital spending in the U.S. economy—rose 1.0% in September, with 4.5% growth over the past 12 months.
- Manufacturing added 38,000 workers in October, rising for the sixth straight month. Despite recent gains, the labor market for the sector remains well below its pre-COVID-19 pace, with manufacturing employment down by 621,000 in October relative to the level in February. The current outlook is for 12,300,000 employees in the manufacturing sector at year’s end, with continued growth next year, up from 12,231,000 in October.
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