The ISM Manufacturing survey again marginally declined but continued in expansion. The key internals are in expansion. The Markit PMI manufacturing Index is in positive territory and was little changed.

Analyst Opinion of the ISM Manufacturing Survey

Based on these surveys and the district Federal Reserve Surveys, one would expect the Fed’s Industrial Production index growth rate remain about the same as last month. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession. This month the ISM survey went down and the Markit survey was little changed.

From Econoday:

From the Markit PMI Manufacturing Index:

New order growth accelerates to five-month high

• Upturn in new business quickens to sharp rate
• Export orders increase fractionally
• Rate of job creation picks up to ten-month high
• U.S. manufacturing firms signalled a strong start to the final quarter of 2018, with operating conditions improving at a faster pace in October. Driving the latest development in the health of the sector was a sharp increase in new business. The upturn in total new work reached a five-month high, though only a fractional rise in new export orders was registered. Greater production requirements and efforts to clear backlogs meanwhile led to a quicker monthly rise in hiring, the fastest for ten months. Price pressures remained intense, however, with rates of input price and output charge inflation accelerating. At the same time, business confidence picked up from September’s 12-month low
• The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 55.7 in October, broadly in line with September’s reading of 55.6. The latest figure signalled a further pick up in growth momentum and a strong improvement in the health of the manufacturing sector. Moreover, October’s reading reached a five-month high.