U.S. Manufacturing Index Indicates Slightly Slower Growth In November

(RTTNews) - Activity in the U.S. manufacturing sector grew at a slightly slower rate in the month of November, according to a report released by the Institute for Supply Management on Monday, although the index of activity in the sector fell by much less than anticipated.

The ISM said its purchasing managers index edged down to 58.7 in November from 59.0 in October, with a reading above 50 indicating continued growth in the manufacturing sector.

Economists had expected the ISM's manufacturing index to show a somewhat more substantial decrease to a reading of 57.8.

The modest pullback by the headline index was partly due to a slower rate of production growth, as the production index dipped to 64.4 in November from 64.8 in October.

The employment index also fell to 54.9 in November from 55.5 in October, indicating a slower rate of job growth in the manufacturing sector.

The ISM also said raw materials prices decreased for the first time since July of 2013, with the prices index tumbling to 44.5 in November from 53.5 in the previous month.

On the other hand, the report said the new orders index inched up to 66.0 in November from 65.8 in October. The exports index also climbed to 55.0 from 51.5.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "At face value, the survey remains consistent with annualized GDP growth of close to 4% in the fourth quarter and annualized gains in manufacturing output of around 10%."

"Those figures look like wishful thinking to us," he added. "Although we remain optimistic about the outlook, we expect fourth-quarter GDP growth to be closer to 2.5%."

Wednesday morning, the ISM is scheduled to release a separate report on activity in the U.S. service sector in the month of November.

Economists expected the ISM's non-manufacturing index to inch up to 57.5 in November after slipping to 57.1 in October.