US Manufacturing Suffers 13-Month Contraction Streak In November, Falling Short of Forecasts

The U.S. manufacturing sector’s struggle persisted through November, with the Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) remaining in contractionary territory at 46.7.

This figure, unchanged from October, missed market forecasts of 47.6, marking the thirteenth month of consecutive contraction for the U.S. manufacturing sector. Here are the key findings:

• New Orders Index: Although slightly improved, it stayed in contraction at 48.3, up from 45.5 in October.
• Production Index: Dipped to 48.5, down from October's 50.4.
• Prices Index: Increased to 49.9, a significant rise from 45.1 in October.
• Backlog of Orders Index: Fell to 39.3, decreasing from 42.2.
• Employment Index: Dropped to 45.8, lower than October's 46.8.

Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, highlighted the ongoing challenges in demand and production execution, with firms aggressively managing labor costs and material inputs.

S&P Global’s US Manufacturing PMI Also In Contraction

The final reading of the S&P Global U.S. Manufacturing PMI was confirmed at 49.4 in November, down from 50 in October. This marked the index’s lowest point in three months.

Chris Williamson, chief business economist at S&P Global Market Intelligence, pointed out the challenges faced by U.S. manufacturers, with stagnating output and declining new work inflows.

He also noted some positive signs in the inventory cycle, particularly among producers of intermediate goods.

Market Reactions: Treasury yields fell on Friday, with the 10-year yield trading at 4.30%. The iShares 20+ Year Treasury Bond ETF TLT inched 0.1% higher.

Tech stocks fell, with the Invesco QQQ Trust QQQ down 0.5%. Conversely small caps, as tracked by the iShares Russell 2000 ETF IWM rose 0.5%.

Both the S&P 500 and the Dow Jones Industrial Average were little moved at 10:30 a.m. in New York.

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