[ForexNews]

The ISM manufacturing index slipped to 53.6 in November from 55.7 in October, below consensus (55.0) expectations. However, the components remained consistent with robust growth in the sector. The forward-looking new orders component increased to 60.3 from 58.5, indicating that demand continues to improve at a strong pace. Production slipped to 59.9 from 63.3, while the employment index fell to 50.8 in November from 53.1 in October but remained above the breakeven point of 50. Manufacturing payroll declines intensified in the October employment report, but the positive ISM employment readings suggest that an improving trend is likely in the coming months. The supplier delivery index slid to 55.7 from 56.9, and the inventories index fell to 41.3 from 46.9. The decline in the inventories index indicates a greater pace of inventory liquidation, which may be unintentional given the consistently strong demand in the sector over the past few months. Outside the components contributing to the headline index, new export orders increased to 56.0 from 55.5, and imports ticked higher to 51.5 from 51.0. The prices index fell to 55.0 from 65.0.

While the headline index decreased in October, analysts do not view this as a weak report. New orders increased, employment remained in growth territory, and the greatest source of weakness was inventory liquidation, which may have been unintentional. With demand pushing higher, market expects the manufacturing sector recovery to continue over the coming months.