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United States · Inflation & data · Source: Institute for Supply Management (PR Newswire)
US factory activity strengthens in October as ISM index rises to 55.5
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Summary: US manufacturing grew faster in October, with output at its strongest since late 2021, according to the Institute for Supply Management (ISM). Firms still reported widespread price increases, and more of their comments were negative than positive.
What happened
ISM's Manufacturing PMI rose to 55.5 in October from 54.5 in September. A reading above 50 means more firms reported improvement than deterioration. It was the 10th month in a row in expansion territory. All five components of the headline index were above 50, one more than in September. ISM said production rose to 59.0, its highest since November 2021, and new orders edged up to 55.5. Employment kept growing, though a little more slowly, inventories returned to growth, and supplier deliveries kept slowing.
The prices index eased to 75.2 from 77.9 but has now signalled rising input costs for 25 months in a row. ISM said 53.1% of respondents reported paying higher prices in October. It linked the pressure to steel and aluminium costs, tariffs and petroleum-based products affected by the Middle East conflict. Reuters reported that economists it polled had expected the index to stay at 54.5.
Background
Activity and mood are moving in different directions. Susan Spence, who chairs ISM's survey committee, said "general sentiment got worse for a third month in a row". ISM said 66% of comments from respondents were negative and most often mentioned pricing volatility, longer lead times, tariffs and the war involving Iran. ISM also listed electronic components, memory chips, copper and aluminium among items in short supply. According to Reuters, demand is being supported by consumer spending and business investment in artificial intelligence. The Federal Reserve kept its policy rate at 3.75%–4.00% last week.
Why it matters for markets and crypto
Factory surveys are among the first monthly signals of growth and price pressure in the US economy. Persistent input-cost increases feed into inflation, which central banks weigh when setting interest rates. Rates in turn shape financial conditions for all asset classes, including digital assets. This data relates to the wider economy and does not express a view on any asset.
What to watch next
- 3 November 2026: US midterm elections, according to Reuters.
- December 2026: the Federal Reserve's next rate decision. Reuters reported that economists expect a hike; that is a forecast, not a decision.
- 1 December 2026, 10:00 ET: ISM's November manufacturing report, per ISM's release.
Sources
- Institute for Supply Management, "Manufacturing PMI at 55.5%; October 2026 ISM Manufacturing PMI Report" (via PR Newswire), 2 November 2026
- Reuters via Investing.com, "US manufacturing strengthens in October, input prices stay high", 2 November 2026
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