US ISM manufacturing index holds steady in October

The ISM manufacturing index ticked down one-tenth, to 50.1, in the October reading (previous: 50.2), in line with consensus expectations (50.0) and stronger than forecast (49.5) for an outright contraction. In contrast to some regional manufacturing surveys, portions of aggregate national activity rebounded modestly on the month. New orders rose to the highest level since July (52.9, previous: 50.1), and production reversed its September deceleration (52.9, previous: 51.8).

Employment, on the other hand, fell sharply, to 47.6 (previous: 50.5), in an indication of continued headwinds facing goods-sector employment growth. Export orders contracted for the fifth consecutive month (47.5, previous: 46.5), and the imports index declined to 47.0 (previous: 50.5).

"This morning's data indicate that manufacturing activity stabilized in October, but we see further headwinds from a strong dollar and weak foreign demand as likely to prevent a robust rebound", says Barclays.