October final US factory gauge falls to 54.9 from 56.0 preliminary

• The initial October estimate was 56.0.
• September had a final PMI of 55.9.

October 2026 data as reported by S&P Global:

• The manufacturing PMI is now 54.9, off from 55.9 (a 52-month peak).
• Employment recorded its biggest expansion since April 2021.
• Selling prices rose at the fastest clip since September 2022.
• Delivery times for suppliers stretched more than at any point since August 2022.
• New order growth eased to its lowest since March.
• Export orders posted a small gain, the first since June 2025.

US factory output grew steadily in October, though the pace moderated. The S&P Global Manufacturing Purchasing Managers' Index fell to 54.9 from 55.9 in September, remaining above the 50.0 growth line for a 15th straight month. Gains in production and new orders decelerated, while exports finally ticked upward despite persistent tariff hurdles.

Inflation remains a key worry. Rising outlays for energy, transport and metals, combined with tariffs and tight supply, drove the steepest increase in factory gate prices since September 2022. Suppliers could not keep up with demand, especially for products tied to AI data center construction. Long delivery times and swelling orders built up backlogs, causing the most vigorous hiring in manufacturing since April 2021.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“US factories continued to report strong expansion in October, sustaining the sector’s best growth spell since early 2022. The upturn is also generating jobs at a pace not seen for five-and-a- half years, during the surge in demand seen during the pandemic. However, growing pains are clearly evident, with factories struggling to meet strong demand, especially for AI-related goods and equipment, amid supply chain disruptions. Delivery delays, often linked to shipping and logistics issues, are more widespread than at any time since 2022. With demand often exceeding supply, producers have been increasingly able to pass higher costs on to customers, notably for energy-related inputs. October consequently saw another leg-up in terms of manufacturers’ selling price inflation to the steepest since September 2022. Such steep growth in factory gate prices will inevitably feed through to consumers in the coming months, keeping inflation well above the Fed’s target and adding to pressure on policymakers to raise interest rates further.”

In brief: the pace decelerated, yet the figures remain solid. The combination of robust hiring and higher selling prices could reduce the Federal Reserve's latitude to loosen policy. That mix tends to bolster the dollar and Treasury yields, while higher outlays may weigh on corporate profits. The compensating factor is weaker new-order gains; some clients expedite orders to secure price levels. The key question is how long underlying demand persists after that purchase wave recedes.

Report background: Each month, S&P Global polls factories on production, orders, staffing, supplier shipments and stockpiles. Figures above 50 indicate better business conditions; those below point to a worsening climate. Market participants also watch the price subindexes for early inflation warnings.

The ISM's factory PMI is due at 10 a.m., forecast at 54.5 compared with 4.5 a month ago.

The US dollar is seesawing in North American trading. Equities are gaining, with

• the Dow industrials advancing 1.07%,
• the S&P index climbing 0.60%, and
• the Nasdaq composite rising 0.77%.

US Treasury yields are mainly dropping; the 10-year note slid 4.5 basis points to 4.883%. The yield had previously touched a high of 5.36%.