US ISM Manufacturing PMI Beats at 55.5 While S&P Global Final Reading Disappoints at 54.9

US manufacturing data for October delivered a split verdict on Monday. The ISM Manufacturing PMI rose to 55.5, topping the consensus estimate of 54.5 and September's reading of 54.5, reaching its highest level in three months and confirming the sector remains in expansion. New Orders held firm at 55.5 against a prior 55.3, while the Employment index came in at 52.4, above the 52.0 forecast though slightly below September's 52.7.

The S&P Global final manufacturing PMI told a softer story, printing at 54.9, well below the flash estimate of 56.0 and down from September's 52-month high of 55.9. S&P Global chief economist Chris Williamson characterized the sector as showing continued strong expansion but said growing pains were clearly evident. New orders under the S&P survey increased at the slowest rate since March, and input shortages were noted, though business expectations remained confident.

Inflation pressures showed some easing. The ISM Prices Paid index fell to 75.2, below both the 77.2-77.5 consensus and September's 77.9. However, ISM survey chair Spence said he was not relieved by the small drop, adding he does not expect prices to fall further until the Iran conflict is resolved. Respondents also cited tariffs as a source of concern, with Spence noting more negative comments in the October report than prior months.

Elsewhere, Canada's S&P Global Manufacturing PMI slipped into contraction territory at 49.6 in October, down sharply from 51.5 in September, signaling a potential slowdown in Canadian factory activity. US construction spending for September fell 1.9% month over month, badly missing the 0.3% gain forecast and reversing September's prior 0.9% rise. The week's data arrives alongside a busy calendar including US midterm elections on Tuesday, Apple earnings Monday evening, and the nonfarm payrolls report on Friday.