The Institute for Supply Management (ISM) showed the U.S. manufacturing sector contracted for the eighth consecutive month in November, with the headline PMI rising to 48.4 from October’s 46.5, still below the 50.0 expansion threshold.
The report highlighted that while manufacturing activity remained in contraction territory, the pace of decline moderated compared to October.
Only three of the 14 manufacturing industries reported growth in November: Food, Beverage & Tobacco Products; Computer & Electronic Products; and Electrical Equipment, Appliances & Components.
Key points from the ISM report:
- Manufacturing PMI registered 48.4 in November, up from 46.5 in October
- New Orders Index returned to expansion at 50.4, first time since March
- Production Index edged higher to 46.8 from 46.2 previously
- Employment Index improved to 48.1 from October’s 44.4
- Prices Index eased to 50.3 from 54.8, showing slower cost increases
Link to ISM Manufacturing Report for November 2024
While November’s report showed some improvement, manufacturing sector headwinds persist. Analysts note that uncertainty around potential trade policies and their impact on supply chains could continue weighing on the sector until there’s more clarity on the trading environment manufacturers face.
Market Reactions
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar saw mixed reactions across major pairs following the release. While initial moves were muted, the greenback gradually strengthened against several counterparts in the hours after the report.
The biggest gains were seen against the British pound (GBP) and Australian dollar (AUD), with USD/GBP and USD/AUD rising about 0.40-0.50%. The euro (EUR) and Swiss franc (CHF) pairs showed more modest gains of 0.20-0.30%, while USD/CAD lagged with just a 0.11% increase.
Only the Japanese yen (JPY) managed to strengthen against the dollar, with USD/JPY declining around 0.21%.
The better-than-expected headline number and return to expansion in New Orders likely supported the moderate USD gains, though ongoing manufacturing weakness and easing price pressures may have limited more substantial moves.