Manufacturing activity in the U.S. unexpectedly grew at a faster rate in the month of November, according to a report released by the Institute for Supply Management on Monday.
The ISM said its purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 57.5.
The unexpected rebound by the headline index was partly due to strong demand, as the new orders index jumped to 62.1 in November from 57.4 in October.
"Customer demand expansion reversed two consecutive months of softening, with the index returning above 60 percent and recording its highest value since August," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.
The production index also edged up to 60.6 in November from 59.9 in October, while the employment index climbed to 58.4 from 56.8.
"Employment continued to expand, supporting production growth," Fiore said. "Respondents continued to note labor-market issues as a constraint to their suppliers' production capability."
Meanwhile, the report said the prices index tumbled to 60.7 in November from 71.6 in October, indicating a notable slowdown in the pace of price growth.
The prices index slumped to its lowest level since hitting 53.0 in June of 2017, although Fiore noted price increases continue across all industry sectors.
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of November.
The ISM's non-manufacturing index is expected to slip to 59.2 in November from 60.3 in October, indicating a slowdown in the pace of service sector growth.
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