Economic data for the month kicked off on a positive note today with a better than expected ISM Manufacturing report. While economists were expecting a headline reading of 56.1, the actual reading came in at 59.0. This is a level we saw in August and that was the highest level since March 2011.
The table below breaks out this month's report by each of the ISM's subcomponents and compares the current levels to where they were last month and last year. As shown in the table, all but one of the components were above 50 this month (the threshold for growth), and just two (Prices Paid and Export Orders) declined relative to last month. Given the decline in commodity prices, the drop in Prices Paid is not surprising. Likewise, with the strength we have seen in the dollar, the drop in Export Orders is to be expected as well.
Compared to one year ago, October's ISM Manufacturing report was nearly equally as impressive. Again, of the ten subcomponents seven are higher now than they were then. Components where we saw the biggest increases were in Customer Inventories, New Orders, and Production, while the biggest decline came in Prices Paid. Finally, with the October nonfarm payrolls report coming up on Friday, the employment component of the ISM Manufacturing provided some support as it increased to 55.5 from last month's level of 54.6 and last year's level of 54.8.