By Robert Hughes
The Institute for Supply Management's manufacturing PMI composite index remained below the neutral 50 level for the third consecutive month in October, rising to 48.3 from 47.8 in September (see top chart). For this index, 50 is neutral, with readings above 50 suggesting expansion and readings below 50 suggesting contraction in manufacturing. Historically, readings above 42.9 have suggested expansion of the overall economy. The October result is the 126th consecutive month above 42.9 but the third straight month below 50.
Among the key components of the manufacturing index, the production index was