US Manufacturing Shrinks for Eighth Month on Sluggish Demand

Core Insights - US factory activity has contracted for the eighth consecutive month, primarily due to reduced production and weak demand [1] - The Institute for Supply Management's manufacturing index decreased by 0.4 points to 48.7, indicating ongoing contraction as readings below 50 signify a shrinking manufacturing sector [1] Production and Employment - The production index fell by 2.8 points to 48.2, marking the second contraction in the last three months, which has contributed to a depressed employment situation [2] - The ISM's employment gauge has declined for the ninth straight month, although at a slightly slower rate than in September [2][6] Trade Policy Concerns - Manufacturers express ongoing concerns regarding the uncertainty surrounding trade policy from the Trump administration, which affects their outlook [3] - The lack of clarity in trade relations is contributing to a cautious approach among manufacturers [4] Inflation and Input Costs - Inflationary pressures are easing, with the index of prices paid for raw materials dropping nearly 4 points to 58, the lowest level since the beginning of the year [4] - Since reaching a peak in April, the price gauge has decreased by nearly 12 points, suggesting that the worst of tariff-driven pressures on input costs may be over [5] Employment Strategies - Companies are increasingly focusing on reducing headcount due to uncertain demand, with a ratio of 3.4 comments on employment reductions for every comment on hiring [6] - Layoffs and not filling open positions are the primary strategies for managing workforce levels [6]