Economy Watch: Manufacturing Sector Continues Expansion
By Dees Stribling, Contributing Editor
Activity in the U.S. manufacturing sector expanded in October for the fifth month in a row, and the nation’s overall economy grew for the 53rd consecutive month, according to in the Institute for Supply Management’s latest Report On Business, which was released on Friday. The PMI registered 56.4 percent, an increase of 0.2 percentage points from September’s reading of 56.2 percent.
The PMI has increased each month since June, with October’s reading reflecting the highest level in 2013. The New Orders Index increased slightly in October by 0.1 percentage points to 60.6 percent, while the Production Index dropped by 1.8 percentage points to 60.8 percent. The Employment Index came in at 53.2 percent, a decrease of 2.2 percentage points compared to September’s reading.
“The panel’s comments are generally positive about the current business climate,” noted Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “However, there are mixed responses on whether the government shutdown and potential default have had any effect on October’s results.”
Auto sales change little in October
WardsAuto estimated on Friday that U.S. auto and light truck sales were at an annualized rate 15.17 million units in October. That’s an increase of 5.9 percent compared with October 2012, but slightly down from the sales in September. The company posits that some of the weakness in October was because of the government shutdown.
The October rate was, in fact, the lowest since April. Still, 2013 is expected to be a good year for auto sales, perhaps as much as 9 percent higher than the previous year. That rate of increase wouldn’t be quite as strong as the years from 2010 to ’12, however, when double-digit increases were the norm.
At about 15 million units a year, the sales rate for cars and light trucks is roughly back to where it was in the mid-1990s. Sales increased from the late ’90s through much of the 2000s, occasionally spiking above 20 million units, but more often hovering around 17 million units. The onset of the recession crashed sales to about 10 million units, but unlike housing, car sales’ recovery from that low level has been relatively quick.
Wall Street had a mildly positive day on Friday to kick off the month, with the Dow Jones Industrial Average up 69.8 points, or 0.45 percent. The S&P 500 gained 0.29 percent and the Nasdaq advanced 0.06 percent.