NEW YORK, NOV. 1 -- Despite the turmoil in the stock market, the U.S. economy continued growing strongly during October, the nation's corporate purchasing managers reported today.
The National Association of Purchasing Management said its monthly indicator rose to 61.8 percent in October, topping the 60.7 percent reading in September and reaching its highest level since December 1983.
During October, the stock market suffered record declines before rebounding at month's end.
"Notwithstanding what happened with the stock market, the economy entered the fourth quarter as it ended the third, with vigorous growth," said Robert J. Bretz, chairman of the trade group's business survey committee. "Virtually all indicators were positive and the strength of new orders definitely suggests continued growth in November."
Bretz, who is director of materials management for Pitney Bowes Inc., said the group's index averaged 57.1 percent for the first 10 months of 1987. On an annual basis, that would indicate inflation-adjusted gross national product growth of 4 percent, he said.
A reading above 50 in the index generally indicates the economy is expanding, while one below indicates a decline, according to the group, which has 30,000 members. The index includes business indicators gathered from a monthly survey of purchasing executives at 250 industrial companies.
In its survey, the group found:
New orders rose strongly for the 10th consecutive month, despite slowing in accordance with seasonal factors. Of survey respondents, 35 percent reported growth in new orders while 13 percent reported declines, a positive margin of 22 points. That compared with margins of 31 in September and 23 in August.
Production also rose for the 10th straight month, but slowed from September, with 35 percent reporting higher production and 10 percent reporting a decline. The margin of 25 points compared with a margin of 34 in September and 25 in August.
Employment grew briskly, rising for the third consecutive month with 19 percent reporting employment gains and 12 percent reporting employment declines, a margin of 7 points. That compared with margins of 6 points in September and 3 points in August.
Purchasers reported price increases more often than decreases for the 14th consecutive month, with 57 percent of those surveyed reporting price hikes and 1 percent reporting price declines. The margin of 56 compared with margins of 52 in September and 49 in August.
Among specific commodities, those increasing in price included several paper products, including corrugated shipping containers and kraft linerboard; steel, aluminum, copper and nickel; cotton; and color dyes. Short supplies were reported for steel, aluminum, steel sheets, titanium dioxide, a pigment; and caustic soda.