U.S. Manufacturing Contracts for First Time in Three Years [View all]
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Source: Bloomberg
By Reade Pickert
September 3, 2019, 7:00 AM PDT Updated on September 3, 2019, 7:25 AM PDT
U.S. factory activity unexpectedly contracted in August for the first time in three years as shrinking orders, production and hiring pushed a widely followed measure of manufacturing to its lowest level since January 2016.
The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 signal the manufacturing economy is generally contracting. The group’s gauge of new orders dropped to a more than seven-year low, while the production index shrank to the weakest level since the end of 2015.
Faltering manufacturing could complicate President Donald Trump’s re-election campaign as recent data undermines one of his signature promises for a strong economy. Stocks extended declines and the yield on 10-year Treasuries fell sharply Tuesday after the data was released. The dollar weakened.
The latest downturn underscores how slowing global growth and an escalating U.S. trade war with China are taking an even bigger toll on domestic producers. Although manufacturing only makes up about 11% of the economy, there are concerns that entrenched weakness -- and any layoffs that may result -- could filter through to the rest of the economy and endanger the record-long expansion.
Read more: https://www.bloomberg.com/news/articles/2019-09-03/u-s-manufacturing-contracts-for-first-time-in-three-years?srnd=premium
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