U.S. manufacturing output accelerated in October, but soft sales drove record growth in unsold inventory.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, evaluates the US PMI for October: The US manufacturing sector had a solid start to the fourth quarter, with output growth accelerating mainly in response to strong growth in new orders. However, the reality may not be as optimistic as it seems, as unsold inventories in October saw an unprecedented increase, which is widely believed to be related to weak sales, especially in export markets. If demand does not recover, this surge in inventories could lead to a slowdown in production in the coming months. Additionally, business expectations for the next year have become more pessimistic, with confidence levels approaching the low levels seen in April when tariff policies were announced. The uncertainty surrounding US trade policies has once again become a significant factor in depressing business confidence, as more and more companies blame tariff policies for export losses and interruptions in import supply chains. Concerns about foreign trade and imports have been exacerbated by political issues such as government shutdowns, especially pronounced in consumer-oriented industries. Business confidence among consumer goods manufacturers has fallen to its lowest level in two years.