ISM MANUFACTURING --
Manufacturing in the U.S. expanded more than forecast in October as measures of production and orders placed with factories rose to five-month highs.
The Institute for Supply Management’s factory index increased to 56.9 last month, the highest since May, from 54.4, the Tempe, Arizona-based group said today. Readings greater than 50 signal growth and the median forecast of economists surveyed by Bloomberg News was for a decline to 54.
Companies such as Cummins Inc. are benefiting from growing overseas demand and domestic investment in new equipment, helping sustain the industry that led the recovery from the worst recession since the 1930s. Still, the U.S. economy is growing too slowly to reduce a jobless rate lingering near 10 percent, explaining why the Federal Reserve may opt to ease monetary policy this week.
''Equipment and software spending continues to move forward,'' John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said in an interview with Bloomberg Television before the report. ''It seems there is continued underlying demand in the U.S. economy.''
Estimates in the Bloomberg survey of 75 economists for the October factory index ranged from 52 to 56.8. The manufacturing measure has shown expansion for 15 straight months.
PERSONAL INCOME AND SPENDING --
Personal incomes in the U.S. fell in September and spending increased, leading to a drop in household savings rate to its lowest level in more than a year.
While income decreased by $16.8 billion, or 0.1% in September, personal consumption expenditure (PCE) increased 0.2% in September, the Bureau of Economic Analysis (BEA) said on Monday.
Markets had expected income to rise 0.3% and spending by 0.4%.
In August, income and spending increased 0.4% and 0.5% respectively.
''The September change in personal income reflects provisions of unemployment compensation legislation, which had boosted emergency government unemployment benefits in August,'' BEA said.
However, core PCE price index, which excludes food and energy prices, increased less than 0.1% after 0.1% gain in the previous month, the BEA said.
Personal savings totaled $607.6 billion in September against $642 billion in August.
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