The ISM® (Institute for Supply Management®) Manufacturing PMI® for October reported in at 50.2%, as business activity fell 0.7 points from September’s level, above most economists’ expectations and only slightly above the 50% threshold indicating expansion. The Manufacturing PMI® figure remains at its lowest level since May 2020, when it registered 43.5%. The index for new orders remained in contraction territory, up 2.1 points to 49.2% from the previous month. Of the six largest manufacturing sectors, only Petroleum & Coal Products increased new orders at a moderate level. The Production index reported up 1.7 points to 52.3%. Of the top six industries, Computer & Electronic Products; Transportation Equipment; and Machinery expanded. “Materials and labor availability continue to improve, but concern remains about medium-term demand”, said Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee. Employment was little changed as the Employment Index registered 50% in October; 1.3 percentage points higher than the September. Price pressures continued to ease for a seventh straight month as the Prices Index fell to its lowest reading since May 2020 to 46.6% down 5.1 percentage points from September.

The Federal Open Market Committee (FOMC) announced the raising of its benchmark federal funds rate by 75 basis points, putting it in the range of between 3.75% and 4.0% -- the highest level since January 2008. This is the sixth rate hike since March and the fourth consecutive FOMC meeting ending with a 75 basis point climb. Since March, the Fed has raised its benchmark federal funds rate 375 basis points or 3.75%. The FOMC in its statement said that “Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.” The Fed also hinted that it may take a less aggressive stance moving forward, stating that “the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments” when determining future rate hikes.

The U.S. Bureau of Labor Statistics reported 261,000 jobs were added in October, down from September’s upwardly revised 315,000. August and September job revisions combined for 29,000 added jobs - August was revised down 23,000 and September was revised up 52,000. The unemployment rate reported up slightly to 3.7% from 3.5%, as the number of unemployed workers rose by 306,000 to 6.1 million. The labor force participation rate continued to edge lower to 62.2% from 62.3% as the size of the labor force decreased by 22,000. Job gains were relatively broad-based with increases in healthcare (+53K), professional and technical services (+43K), manufacturing (+32K), social assistance (+19K), wholesale trade (+15K), and leisure and hospitality (+35,000). Payrolls dropped in warehousing (-20K) and real estate rental and leasing (-8.7K). Average hourly earnings increased by 0.4% in October. At $32.58 average hourly earnings are up 4.7% from a year ago.