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US MANUFACTURING ACTIVITY HITS TWO-YEAR LOW

08-11-2015
by 
in 

US manufacturing activity grew last month at its slowest pace since May 2013 as manufacturers cut jobs.

But manufacturers are hopeful a rise in new orders will offset the effects of a strong dollar and big spending cuts by energy companies.
The Institute for Supply Management reported that its index of factory activity slipped to 50.1 in October from 50.2 in September.

The figures barely signal growth, which is any reading above 50.

The report showed that a measure of hiring fell sharply, from 50.5 to 47.6 – meaning that manufacturers axed jobs last month.

Other data showed construction spending rose in September, indicating the economy remained on firmer ground despite signs of consumer spending cooling.
Given that manufacturing accounts for only 12 per cent of the economy, analysts said it was unlikely to influence the Federal Reserve's decision whether to raise interest rates this year.
"We are marginally encouraged by a pickup in the new orders, but export orders continue to contract. We do not expect the manufacturing data will cause the Fed to push the first rate hike back into 2016," said John Ryding, chief economist at RDQ Economics in New York.
Strong car sales, which are running at their highest level in a decade, are one of the few trends working in the opposite direction.

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