The Institute for Supply Management (ISM) released data on Monday revealing that its measure of U.S. manufacturing improved beyond expectations in November, although it continued to reflect a contraction in the sector. The ISM's manufacturing Purchasing Managers' Index (PMI) climbed to 48.4 in November, up from 46.5 in October. Despite this increase, a reading below 50 still signals a contraction. Analysts had projected the index to slightly rise to 47.5.
The unexpected rise in the manufacturing PMI was largely driven by a rebound in new orders, with the new orders index escalating to 50.4 in November from 47.1 in October. Additionally, the report noted a modest increase in the production index, which edged up to 46.8 in November, compared to 46.2 in the previous month. The employment index saw a significant jump, reaching 48.1 in November from 44.4 in October.
Conversely, the ISM reported that the prices index fell to 50.3 in November from 54.8 in October, indicating only a slight increase in raw material prices.
The ISM is set to release a separate report regarding the service sector activity for the month of November on Wednesday. Current economic forecasts suggest that the ISM's services PMI may slightly decline to 55.6 in November from 56.0 in October. Nonetheless, a reading over 50 would still signify growth in the services sector.
