ISM PMI Slips But Manufacturing Still Expanding

Manufacturing activity grew for the 16th consecutive month but slowed to a PMI reading of 56.6 in September’s Manufacturing ISM Report on Business. While economists were expecting a smaller drop of 58.2 to 58.5 from last month’s reading of 59.0, U.S. manufacturing is still holding strong.

“The September PMI registered 56.6 percent, a decrease of 2.4 percentage points from August’s reading of 59 percent, indicating continued expansion in manufacturing. The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from the 66.7 percent reading in August, indicating growth in new orders for the 16th consecutive month. The Production Index registered 64.6 percent, 0.1 percentage point above the August reading of 64.5 percent. The Employment Index grew for the 15th consecutive month, registering 54.6 percent, a decrease of 3.5 percentage points below the August reading of 58.1 percent. Inventories of raw materials registered 51.5 percent, a decrease of 0.5 percentage point from the August reading of 52 percent, indicating growth in inventories for the second consecutive month. Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest.”