NEW YORK – U.S. manufacturing output was barely changed in October from the prior month's solid pace of expansion, and factories again took on more workers despite an energy-related increase in costs, a survey showed on Tuesday.
The Institute for Supply Management (search) said its index of national factory activity eased to 59.1 in October from 59.4 in September, compared with forecasts for a bigger drop to 57.0.
A reading above 50 denotes expansion in the sector, which has been growing for 2 1/2 years. The survey's prices paid measure highlighted a sore spot for the sector, jumping to 84.0 from September's 78.0.
"While energy prices are a major concern and price pressures are in the factory pipeline, business is still quite good," said Stuart Hoffman, chief economist at PNC Financial Services (search).
Reaction to the data was muted in financial markets, which were keenly awaiting the Federal Reserve's (search) interest rate decision.
Analysts said the sort of rising price signals seen in the ISM report was certain to keep U.S. central bankers tightening monetary policy for some while to come.
"The prices paid component plays into fears that the Fed may be behind the curve," said Scott Anderson, senior economist at Wells Fargo.
The ISM's employment gauge climbed to 55.0 from 53.1, marking the fourth straight month of job growth in the sector, although new orders slipped to 61.7 from 63.8.