United States: U.S. manufacturing sector moderates in July
August 1, 2016
Following two consecutive increases, the ISM manufacturing index declined more than expected in July. The indicator fell from 53.2 in June to 52.6 in July and came in below market expectations of 53.1. Despite the disappointing result, the manufacturing sector grew for the fifth consecutive month as the ISM index remained above the 50-threshold that indicates an expansion where it has been since March.
The underlying details show that new orders remained virtually unchanged in July and manufacturing output increased slightly. Conversely, the rest of sub-gauges showed a broad-based deterioration in July. Backlogs of orders, employment and inventories dropped compared to the previous month, with inventories falling for the thirteenth consecutive month. Supply delivery times also slowed down considerably in July.
Author: Ricardo Aceves, Senior Economist