United States PMI August 2016

United States

United States: U.S. manufacturing sector contracts in August for first time in six months

September 2, 2016

The ISM manufacturing index declined more than expected in August and entered into contractionary territory for the first time since February. The indicator fell from 52.6 in July to 49.4 in August and came in below market expectations of 52.5. This brought the ISM index below the 50-threshold that indicates an expansion.

The underlying details show a broad-based deterioration. New orders dropped to an eight-month low in August and manufacturing output plunged to the lowest level in four years. Furthermore, employment and supply deliveries decreased compared to the previous month. Inventories’ levels remained virtually unchanged over the previous month.

FocusEconomics Consensus Forecast panelists expect that industrial production will contract 0.5% in 2016, which is unchanged from last month’s forecast. For 2017, panelists see industrial production rebounding and expanding 2.1%.

Author:, Senior Economist

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United States PMI Chart

USA PMI August 2016

Note: Composite index in the Manufacturing Report on Business (PMI). Readings above 50% indicate an expansion in the manufacturing sector while readings below 50% point to a contraction.
Source: Institute for Supply Management.

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