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Manufacturing Index Shows Continued Economic Expansion in October

Economic activity in the U.S. manufacturing sector expanded in October for the third consecutive month, according to the Institute for Supply Management (ISM). The organization's monthly manufacturing index jumped 3.1 percent to 55.7, indicating the highest rate of growth since April 2006, when the index was 56. The number is higher than the average industry analyst prediction of 53 as reported by both the Financial Times and the Associated Press. Any number above 50 indicates growth. "The jump in the index was driven by production and employment, with both registering significant gains," says Norbert J. Ore, chair of ISM's Manufacturing Business Survey Committee. "Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode." Also significant is the ISM's employment index, which jumped nearly 7 percentage points to 53.1; it is the first month of growth in manufacturing employment data after 14 consecutive months of decline. ISM says 13 industries reported growth in October: petroleum and coal products; apparel, leather, and allied products; furniture and related products; chemical products; computer and electronic products; transportation equipment; plastics and rubber products; machinery; food, beverage, and tobacco products; printing and related support activities; fabricated metal products; electrical equipment, appliances and components; and paper products. Industries reporting contraction are nonmetallic mineral products; primary metals; and wood products. The figures for November will be released on December 1.

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