Manufacturing activity has been steadily decelerating for months and is expected to continue to do so in November.
Industry reports from the Purchasing Management Association of Chicago and National Association of Purchasing Management offer the first glimpse of conditions during the month. Other data have confirmed a slowing trend in the United States, but there is a growing fear among market watchers that the economy could face a hard fall instead of a soft landing.
The Chicago purchasers will set the tone with their report Thursday, followed by the national report Friday. A BridgeNews survey of forecasters put the national index at 48.0, down from 48.3 in October. Prices paid were pegged at 55.0, down from 56.5 and still well below March’s peak of 79.8.
A reading above 50 is viewed as a sign of economic expansion, while one below 50 suggests contraction. Analysts say manufacturing is among the first parts of the economy to see the impact of changes in interest rates and other factors.
But even if the manufacturing reports come out weak, as expected, the Fed probably won’t make any changes in rates or its accompanying bias at its next Federal Open Market Committee Meeting on Dec. 19, said Steven Wood, senior economist at Banc of America Securities.
