The Institute for Supply Management index today reported that the U.S. manufacturing sector's growth was lagging for the fourth straight month in October. The index dropped to 50.9% in October, compared to 52% in September. Economists on average predicted the index to come in at 51.5%.
Though the decline was more than expected, the index is towing the imperative 50% level; readings over the half-way mark are indicative that most firms are growing. The ISM index has breached this level for 9 consecutive months now, but will cross below 50% if it continues its 4-month downswing.
In other manufacturing news, the new orders index dropped nearly 1% to land at 52.5%, while the production index lost 5% to dock at 49.6% in October. The prices paid index was the only data to see an incline, as it rose to 63% from 59% a month ago.
Meanwhile, the Federal Reserve reported today that asset-backed commercial paper fell for the 12th recurrent week, dropping 1% to $875 billion in the week ended Wednesday. Asset-backed paper has cascaded 26% since August, rooted by the credit crunch. On a related note, commercial paper rose 0.5% to $1.88 trillion, while paper issued by financial firms soared 3.6% to $824 billion. The paper issued by nonfinancial companies fell short, though, dropping 5.2% to $236 billion.
Other economic data released today includes the Labor Department's initial jobless claims, the Commerce Department's spending and incomes report, and the personal consumption expenditure (PCE).