ISM Index Rises to 56.4 in October

The overall economy grew for the fifty-third straight time, while the manufacturing sector expanded for the fifth consecutive month, the Institute for Supply Management reported Friday.

According to the ISM's monthly report on business, the ISM index climbed to 56.4 in October from 56.2 in September.

Economists polled by Thomson Reuters predicted the index would fall to 55.0.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.

The prices paid index decreased to 55.5 from 56.5. The employment index slid to 53.2 from 55.4 the prior month.

The production index slipped to 60.8 from 62.6, the new orders index crept to 60.6 from 60.5; the supplier deliveries index grew to 54.7 from 52.6; the export orders index jumped to 57.0 from 52.0; and the imports index rose to 55.5 from 55.0.

The inventories index increased to 52.5 from 50.0; the customers' inventories index gained to 47.0 from 43.0; and backlog of orders grew to 51.5 from 49.5.

Respondents' comments included:

"New business is booming." (Textile Mills)

"The government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets." (Fabricated Metal Products)

"The government shutdown has not had any impact on our business that I can determine, nor has it impacted any supplier shipments." (Chemical Products)

"Government spending continues to be slow in defense and military. The government shutdown and debt ceiling crisis did not affect business." (Transportation Equipment)

"Telecom market - wireless and VOIP - appear to be spiking. We are very busy; busier than we have ever been." (Computer & Electronic Products)

"Seasonal demand has not decreased at the typical pace. Market showing resiliency in the residential market." (Primary Metals)

"Business continues to improve every month for the past nine months." (Furniture & Related Products)

"Big Box Store discounting providing increased sales bump short term." (Food, Beverage & Tobacco Products)

"Our customers continue to be cautious and are closely managing their purchases. Business continues to be flat to slightly down." (Machinery)

"Outlook on general appliance market continues in a positive direction. Uncertainty, however, looms with unclear government direction pending." (Electrical Equipment, Appliances & Components)

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