• The IHS Markit Flash U.S. Manufacturing PMI slipped from 60.7 in September to 59.2 in October, the slowest pace of growth since March. Manufacturers in the U.S. continue to cite supply chain bottlenecks and workforce shortages as significant challenges to growth. Output expanded at the weakest pace since July 2020, but employment growth edged higher for the month.

• Supplier delivery times widened to the highest on record, and indices for input and output prices both jumped at the fastest rates in the survey’s history, which dates to mid-2007.

• Manufacturing production fell 0.7% in September. The chip shortage continues to challenge output in the motor vehicles and parts sector, with production in September plummeting 7.2% and output down 15.8% since January. Excluding motor vehicles and parts, industrial production fell 0.1% and 0.2% in August and September, respectively, suggesting broader weaknesses beyond automobiles.

• Manufacturing capacity utilization pulled back for the second straight month from July’s reading of 76.8%, which was the strongest since January 2019, falling to 75.9% in September. Despite easing in the past two months, manufacturing production has risen 4.8% year-over-year, with no change relative to February 2020’s pre-pandemic pace.

• The Philadelphia Federal Reserve Bank’s composite index of general business conditions declined from 30.7 in September to 23.8 in October, but manufacturing activity continued to expand solidly in the district for the month. Pricing pressures remained very elevated. Encouragingly, capital spending plans accelerated to the best reading since July 2020.

• New residential construction activity declined 1.6% from 1,580,000 units at the annual rate in August to 1,555,000 units in September. Housing construction has been challenged this year by rising construction costs, affordability issues and difficulties in finding workers.

• Housing permits fell 7.7% from an annualized 1,721,000 units in August to 1,589,000 units in September, a 12-month low. Yet, builders remained optimistic about growth over the coming months despite ongoing concerns.

• Existing home sales rose 7.0% from 5.88 million units in August at the annual rate to 6.29 million units in September, the strongest pace since January, largely on improvements in supply and strong demand. Nonetheless, activity has drifted lower since peaking at 6.73 million units in October 2020, which was the strongest pace since March 2006.

• Initial and continuing unemployment claims dropped to post-pandemic lows in the latest data.

• California created the most net new manufacturing jobs in September, adding 5,700 workers. Post-pandemic onset, Utah has generated the most employment in the sector, adding 8,800 workers since February 2020. Nebraska had the lowest unemployment rate (2.0%).

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