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United States News Title: ISM U.S. Factory Index Rises in October to Five-Month High Manufacturing in the U.S. expanded more than forecast in October as measures of production and orders placed with factories rose to five-month highs. The Institute for Supply Management’s factory index increased to 56.9 last month, the highest since May, from 54.4, the Tempe, Arizona-based group said today. Readings greater than 50 signal growth and the median forecast of economists surveyed by Bloomberg News was for a decline to 54. Companies such as Cummins Inc. are benefiting from growing overseas demand and domestic investment in new equipment, helping sustain the industry that led the recovery. Still, the U.S. economy is growing too slowly to reduce a jobless rate lingering near 10 percent, explaining why the Federal Reserve may opt to ease monetary policy this week. “Manufacturing is still at the head of this recovery,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “The numbers are strong across the board. It isn’t just inventory building, it is responding to growth in demand probably both here and abroad.” Estimates in the Bloomberg survey of 75 economists for the October factory index ranged from 52 to 56.8. The manufacturing measure has shown expansion for 15 straight months. Stocks extended gains after the report. The Standard & Poor’s 500 Index increased 1 percent to 1,194.86 at 10:17 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to price, fell to 2.59 percent from 2.60 percent late on Oct. 29. China Manufacturing Manufacturing in China expanded in October at the fastest pace in six months, while U.K. factory growth unexpectedly accelerated as hiring and export orders improved, other reports showed today. A China purchasing managers’ index released by the logistics federation rose to 54.7 last month from 53.8. A second PMI, from HSBC Holdings Plc and Markit Economics, jumped to 54.8 from 52.9. A U.K. gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply rose to 54.9 last month from 53.5, according to an e-mailed statement in London. Measures above 50 indicate expansion. The ISM’s U.S. new orders climbed to 58.9 from 51.1, while the production index jumped to 62.7 from 56.5. “Manufacturing continues to outpace the rest of the economy,” Norbert Ore, chairman of the ISM survey, said in a conference call from Atlanta. The gain in orders suggests “manufacturing will continue fairly strong to finish out the year,” Ore said on the call with reporters. Employment, Exports The employment gauge rose to 57.7 from 56.5, and the index of export orders increased to 60.5 from 54.5. The measure of orders waiting to be filled fell to 46 from 46.5 and the index of prices paid increased to 71 from 70.5. The inventory index fell to 53.9 from 55.6 in September, which was the highest since July 1984, while a gauge of customer stockpiles rose to 44 from 42.5. A figure higher than 50 means manufacturers increased stockpiles. Consumer spending rose less than forecast in September and incomes dropped for the first time in more than a year, a Commerce Department report showed today. Purchases rose 0.2 percent, the smallest gain in the third quarter. Incomes dropped 0.1 percent, the first decrease since July 2009. Asset Purchases Central bankers meeting Nov. 2-3 are concerned economic growth is not strong enough to reduce an unemployment rate close to 10 percent. Fed Chairman Ben S. Bernanke said on Aug. 27 that the central bank “will do all it can” to sustain the economy recovery. Investors are anticipating policy makers will announce another round of asset purchases after buying $1.7 trillion in debt from December 2008 to March. Economists Jan Hatzius at Goldman Sachs and Ethan Harris at Bank of America predict the Fed will spread an initial $500 billion in asset purchases over six months. Hatzius forecasts as much as $2 trillion in eventual asset purchases. The recovery that began in June 2009 from the worst recession since the 1930s has been led by manufacturing as exports climbed, business investment picked up and inventories were replenished. “Many of our U.S. markets remained weak as a result of the slow recovery in the U.S. economy,” Thomas Linebarger, chief operating officer of Indiana-based diesel engine-maker Cummins, said during a teleconference with analysts on Oct. 26. At the same time, “our business, especially in the emerging markets, has come back much faster than we had forecast.” Mid-term elections tomorrow will determine which party controls Congress. There is no clear consensus on which party deserves more blame for the economy’s problems, or how best to fix them, according to a Bloomberg National Poll conducted Oct. 24-26. It showed Republicans are poised to retake the U.S. House without a mandate from voters to carry out their policies.
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#1. To: go65 (#0)
Impossible. We have no manufacturing base. Or highly credible, as just One new manufacturing job/center would increase the ISM. See Indiana hires Statewide Armed Security for Unemployment Offices to 'protect' as EUC checks to stop right after the election. 8D
Zerohedge: Exports contribute substantially to resounding beat as somehow every country is now seeing surging exports to everyone else, and nobody admits to actually importing. Lastly, inventories, the key contributor to the Q3 preliminary GDP beat declined. Go figure.
As the Baltic dry Index is now rolling over: http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
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