Today’s release of the latest ISM Manufacturing report for the month of October came in weaker than expected as things cooled off slightly from a strong September. Looking at the commentary section of this month’s report, though, shows two distinct themes. First, the hurricanes really had a major impact on business operations around the country (yellow highlights). Second, business activity remains strong. Most of the selected comments all indicated that business is strong and accelerating.

While the commentary was strong, the headline index showed a slight decline, falling from last month’s 13-year high of 60.8 down to 58.7. While that represents a relatively large two-point decline, outside of the two prior monthly readings, it would have been the highest monthly print since April 2011!

Like the headline index, breadth in this month’s report was on the weak side in the short-term but still trending higher over the longer term. As shown in the table below, even as all but one of the report’s sub-components declined on a m/m basis, all but one was also up on a y/y over basis. The last time we saw weaker breadth on a m/m basis was in August 2016. Finally, looking ahead to this Friday’s jobs report, although the employment component of this month’s report was down m/m, it saw one of the smallest declines of any component and still remains high relative to history.