The ISM® (Institute for Supply Management®) Manufacturing PMI® reported in at 49.0% for September, as business activity increased (+1.4%) from the previous month. A value below 50% is indicative of a shrinking economy. “The U.S. manufacturing sector continued its contraction trend but at a slower rate, recording its best performance since November 2022, when the PMI® also registered 49.0%. Companies are still managing outputs appropriately as order softness continues, but the month-over-month PMI® improvement in September is a clear positive.” said Timothy Fiore, chairman of the ISM® Manufacturing Business Survey Committee. Of the six biggest manufacturing industries, only Food, Beverage & Tobacco Products; and Petroleum & Coal Products recorded growth in September. The forward-looking new orders sub-index contracted for the 13th consecutive month, increasing (+1.4%), and improving to 49.2%. The Prices Index which measures what companies pay for raw materials and other supplies reported up (+4.6%) to 43.8%, the reading shows raw material pricing dropping, now for the fifth consecutive month. The Employment Index moved into expansion territory increased (+2.7%) to 51.2%. The Backlog of Orders Index dropped (-1.7%) to 42.4% and has now contracted for the twelfth consecutive month following 27 months of expansion. The reading is indicative of output exceeding demand.

The US Energy Information Administration reported that US commercial crude oil inventories decreased by 2.2M barrels to 414.1M barrels (5% below the five-year average) for the week ending September 29th, this is the lowest level since December 2022. The drop in crude oil inventories is attributable to a 944K barrels per day (bpd) increase in crude exports to 4.95M bpd, while net crude imports fell 1.95M bpd to 1.26M bpd. Gasoline inventories increased by 6.5M barrels (1% above the five-year average), and distillate inventories decreased by 1.3M barrels (13% below the five-year average). Total commercial petroleum inventories increased by 4.6M barrels. Crude oil refinery inputs averaged 15.6M bpd, a decrease of 463K bpd as compared to the previous week’s average. Refineries operated at 87.3% of their operable capacity, as gasoline production decreased to an average of 8.8M bpd and distillate fuel production decreased to an average 4.7M bpd. Crude oil imports came in at 6.2M bpd, a decrease of 1M bpd as compared to the previous week. Crude oil imports averaged about 6.9M bpd over the last four weeks, 9.6% more than the same period last year. Total motor gasoline imports averaged 919K bpd, and distillate fuel imports averaged 85K bpd.

The U.S. Bureau of Labor Statistics reported 336,000 jobs were added as the unemployment rate remained at 3.8% in September. July and August’s employment readings were revised up for a combined (+119,000) more jobs. The number of unemployed workers was little changed at 6.4 million. Leisure and hospitality (+96,000) led the way in job gains followed by government (+73,000), health care (+41.000), professional, scientific & technical services (+29,000), and social assistance (+25,000). Among the unemployed, the number of permanent job losers decreased (-48,000) to 1.45M, and the number of reentrants to the labor force increased (+113,000) to 2.04M. The labor force participation rate was unchanged at 62.8%, leaving it is still below the pre-pandemic level of 63.4%. Average hourly earnings increased by 0.2%. At $33.88 average hourly earnings are up 4.2% from a year ago. The average hourly earnings growth reading was the lowest monthly value since February 2022 and the lowest year-over-year value since June 2021.