U.S. Manufacturing Index Inches Higher But Still Indicates Contraction In July
(RTTNews) - A report released by the Institute for Supply Management on Tuesday showed U.S. manufacturing activity contracted for the ninth consecutive month in July.
The ISM said its manufacturing PMI crept up to 46.4 in July from 46.0 in June, but a reading below 50 continues to indicate contraction. Economists had expected the index to inch up to 46.8.
The uptick by the headline index came as the new orders index climbed to 47.3 in July from 45.6 in June, while the production index rose to 48.3 in July from 46.7 in June.
Meanwhile, the employment index slid to 44.4 in July from 48.1 in June, falling to its lowest level since hitting 43.7 in July 2020.
"The U.S. manufacturing sector shrank again, but the uptick in the PMI indicates a marginally slower rate of contraction," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
"Demand remains weak but marginally better compared to June, production slowed due to lack of work, and suppliers continue to have capacity," he added. "There are signs of more employment reduction actions in the near term to better match production output."
On the inflation front, the pries index edge up to 42.6 in July from 41.8 in June, but the reading below 50 indicates raw materials prices decreased for the third consecutive month.
The ISM is scheduled to release a separate report on service sector activity in the month of July on Thursday. The services PMI is expected to slip to 53.0 in July from 53.9 in June.
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