U.S. ISM manufacturing and non-manufacturing indices likely dropped in October

The U.S. ISM manufacturing PMI is expected to have dropped in October. According to a TD Economics research report, the PMI index is likely to have dropped to 60 in the month, preserving some of its hurricane-induced strength as rebuilding efforts continue.

Any correction is expected to be driven by the supplier deliveries index, which rose sharply after the hurricanes and employment, which has been running at multi-year highs. Scope for a large correction is limited given the strength seen throughout regional surveys in October, especially the Philly Fed index. Meanwhile, the ISM non-manufacturing index is likely to have dropped to 57.5 in October, driven by a correction in supplier deliveries.

“That would leave the ISM composite above its Q3 average, consistent with solid above-trend GDP growth in Q4”, added TD Economics.

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