It’s the first business day of the month and that means it’s time for the ISM Manufacturing report. For October, the ISM came in at 57.7. That’s the lowest reading since April, and it was below Wall Street’s forecast of 59.0.
Economists polled by Refinitiv expected the ISM manufacturing index to hit 59 in October. An index tracking new orders registered 57.4 percent, a decrease of 4.4 percentage points from the September reading of 61.8 percent.
“Demand remains moderately strong, with the New Orders Index easing to below 60 percent for the first time since April 2017, the Customers’ Inventories Index remaining low but improving, and the Backlog of Orders Index remaining steady,” Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, said in a press release. “Consumption softened, with production and employment continuing to expand, but at lower levels compared to September.”
The current number is still a good one. Bad numbers don’t start until the mid-40s.
Despite the moderation in the manufacturing numbers, October marked the 114th consecutive month of overall economic growth, according to the Manufacturing ISM report.
The latest read on the health of the manufacturing sector comes amid an ongoing trade dispute between the United States and China as a part of President Donald Trump’s “America First” policy. The White House hopes that it can pressure Beijing into a more favorable trade deal through taxes on Chinese goods.
The president escalated the economic spat in September, imposing tariffs on an additional $200 billion worth of goods from China as of Sept. 24. The next wave of tariffs started at a 10 percent rate before climbing to 25 percent at the start of 2019 if the disagreement between the two nations is not resolved.