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Conflicting data: Is US manufacturing on the upswing or not?

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Conflicting data:  Is US manufacturing on the upswing or not?

Two data heavyweights come to different conclusions.

Reports issued today by two closely-followed market data organizations seemed to come to vastly different conclusions about the state of US manufacturing in October.

The Institute for Supply Change Management issued its October PMI report, which indicated a robust manufacturing expansion in October.  The ISM PMI came in at 59%, widely beating analysts’ expectations of a 56.2% reading.

"October PMI report."

Meanwhile, financial data firm Markit simultaneously released its October report, and the results were quite the opposite.  From Reuters:

The U.S. manufacturing sector slowed in October to its lowest rate of growth since July, while a gauge of new orders hit its lowest level since January, an industry report showed on Monday.

Financial data firm Markit said its final U.S. Manufacturing Purchasing Managers Index fell to 55.9 from September's final reading of 57.5. The reading showed an even sharper slowdown than initially estimated in Markit's preliminary or "flash" PMI reading of 56.2 on Oct 23 and was the index's largest decline since February.

Both gauges are widely-respected and closely-followed by the financial markets and policy-makers, making the apparently disparate conclusions all the more challenging.

However, other indicators of the state of the economy have also been mixed, and often contradictory.  Jobless claims, for instance, have been generally solid, suggesting that hiring has picked up in the overall economy.  But this indicator is somewhat vitiated by the fact that employment levels, wage levels and workforce participation have all been tepid over the same time period.  All of which suggests an uneven and spotty recovery in the US.

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