U.S. Manufacturing Index Indicates Modestly Slower Contraction In August
(RTTNews) - Indicating a slower pace of contraction, the Institute for Supply Management released a report on Friday showing an uptick by its reading on U.S. manufacturing activity in the month of August.
The ISM said its manufacturing PMI rose to 47.6 in August from 46.4 in July, although a reading below 50 still indicates a contraction. Economists had expected the index to inch up to 47.0.
The modest increase by the headline index came as the production index climbed to 50.0 in August from 48.3 in July, indicating production was unchanged following two months of contraction.
The employment index also jumped to 48.5 in August from 44.4 in July, suggesting employment in the manufacturing sector shrank at a notably slower rate.
Meanwhile, the report said new orders index edged down to 46.8 in August from 47.3 in July, as demand remained soft.
"The August composite index reading reflects companies managing outputs appropriately as order softness continues, but the month-over-month increase is a sign of improvement," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
On the inflation front, the prices index shot up to 48.4 in August from 42.6 in July, although the reading below 50 indicates raw materials prices decreased for the fourth straight month.
The ISM is scheduled to release a separate report next Wednesday on service sector activity in the month of August. The services PMI is currently expected to edge down to 52.6 in August from 52.7 in July.
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