WASHINGTON (Reuters) – US manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, amid tightening monetary policy as the economy continues to cool. Offensive protected from the federal side.
The Institute for Supply Management (ISM) on Friday said its National Industrial Activity Index fell to 53.0 last month, the lowest reading since June 2020, when the sector was recovering from losses caused by Covid-19.
The index stood at 56.1 in May. A reading above 50 indicates expansion in manufacturing, which accounts for 11.8% of the US economy. Economists polled by Reuters had forecast a fall of 54.9 in the index.
While some reduction in industrial activity reflects a shift in spending from goods to services, this is in line with recent data showing that rising interest rates are impacting demand.
Consumer spending rose marginally in May, while home construction began, building permits and industrial production all slowed.
The ISM survey’s new orders sub-index fell from 55.1 in May to 49.2. Despite the first drop from the 50 level since May 2020, industries have a lot of work to do to keep factories running.