The U.S. manufacturing sector continues to show more signs of recovery, as the expansion which started back in August and marked the first since January 2008 continues, meanwhile, the housing market continues to show signs of stabilization, though we are yet to see a strong rebound in housing market activity.
The Institute for Supply Management released today its manufacturing index for the month of October, the ISM Manufacturing rose in October to 55.7 from the prior reported estimate of 52.6 and well above median estimates of 53.0, whereas the manufacturing sector has managed to expand now for a third consecutive month in the clearest sign so far that activity is starting to increase in the manufacturing sector.
The prices paid index rose to 65.0 from 63.5, while the production index rose to 63.3 from 55.7, new orders however retreated to 58.5 from 60.8, while inventories rose to 46.9 from 42.5. Moreover, the employment index rose to 53.1 from 46.2, and the new exports orders rose slightly to 55.5 from 55.0.
Activity in the manufacturing sector has been rising over the past three months as new orders, production, and new exports orders started to rebound, however, today the ISM manufacturing index signaled that the employment index started to expand in October, which means that manufacturers started to hire workers finally, though it remains to be seen in the non-farm payrolls which are due later this week.
Sales of pending homes in the Northeast dropped by 2%, however, sales in the Midwest increased by 8.1%, while sales of pending home sales increased in the South by 4.9%. Activity in the housing market is still stabilizing though, as last week the new home sales index dropped slightly, which signaled that the housing market will probably need some time before it can recover from the worst slump in more than seven decades.
The housing market still though has a long way to go, as so far cheap home values and the ongoing support from the U.S. government were the main reasons behind the rebound in activity, while now a new challenge might arise in the future, especially as rising unemployment and tightened credit conditions are expected to weigh down on activity in the housing market
Related Stories
