US manufacturing shrinks more than expected in October

Washington: US manufacturing activity contracted in October by more than analysts had expected as new orders fell sharply, survey data showed Wednesday.

The Institute for Supply Management's (ISM) manufacturing index came in worse than expected at 46.7 percent last month, down from 49.0 percent in September.

This was well below the median expectation of economists surveyed by MarketWatch, and suggests that manufacturing activity remains firmly below the 50 percent threshold indicating growth in the sector.

It was the 12th straight month of contraction, and the lowest monthly figure since July of this year.

"The US manufacturing sector continued to contract and at a faster rate in October," ISM survey chief Timothy Fiore said in a statement.

He added that companies were "still managing outputs appropriately as order softness continues," adding that the new orders index was now contracting at a faster rate.

Of the five subindexes that directly factor into the manufacturing index, only the production index was expanding, Fiore said.

The more rapid contraction will factor into the Fed's decision-making process as it prepares to announce its latest interest-rate decision later Wednesday.

Analysts and traders overwhelmingly expect the US central bank to hold rates steady and indicate it intends to keep them at a 22-year high for some time.