http://www.bloomberg.com/news/2012-10-31/business-activity-in-u-s-shrank-in-october-for-second-month.html
Business activity in the U.S. unexpectedly contracted in October for a second month, adding to signs manufacturing has retreated from its central role in the economic recovery.
A gauge from the Institute for Supply Management-Chicago Inc. rose to 49.9 from 49.7 in September. A reading of 50 is the dividing line between expansion and contraction. The median estimate of 54 economists surveyed by Bloomberg was 51.
The prospect that lawmakers will be unable to avert the $607 billion in automatic tax increases and spending cuts slated to take effect at the beginning of 2013, combined with a global slowdown, may restrain activity for the rest of the year. Nonetheless, gains in U.S. consumer spending over the past two months may limit the damage and help manufacturers overcome the uncertainties surrounding domestic fiscal policy.
“The manufacturing sector is struggling,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who forecast a reading of 49.4. “You’ve got global weakness which is hurting exports. You’ve got uncertainty with the fiscal cliff, which may keep people cautious.”
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