US factories speed up in October as ISM manufacturing gauge climbs to 55.5%

American factories kept humming in October. The Institute for Supply Management said its Manufacturing Purchasing Managers' Index landed at 55.5%, up from 54.5% the month before and comfortably clear of the 50% line that separates expansion from contraction.

The guts of the report mostly leaned the right way. New orders ticked up to 55.5% from 55.3%, and production jumped to 59% from 56.7%. Employment was the laggard, slipping 0.3 percentage points to 52.4%, while the prices index cooled by 2.7 percentage points to 75.2%.

Four of the five subindexes that feed the headline number grew faster than they did in September. The fifth, employment, simply grew more slowly. Either way, manufacturing stayed in expansion territory for the month.

The mood on the shop floor tells a different story. ISM Manufacturing Business Survey Committee Chair Susan Spence said general sentiment worsened for a third consecutive month, with 34% of survey comments positive and 66% negative.

That split is the tension running through the report: hard numbers pointing up, and the people filling out the surveys sounding glum. The prices reading, still north of 75%, is one likely reason why.