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U.S. manufacturing activity accelerated in October, with the purchasing managers’ index rising to 55.5 from 54.5 in September, supported by domestic demand and AI-related spending. The production index climbed to 59, its highest level since November 2021. Inflationary pressures remained elevated despite a decline in the production input prices index to 75.2 from 77.9, as supply disruptions continued and prices rose for commodities including aluminum and copper, as well as electronic components. Meanwhile, sector sentiment deteriorated for a third straight month, and 66% of company comments were negative. Economists expect inflation to remain above the Federal Reserve’s 2% target through 2027.
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