US manufacturing mired in weakness; construction spending falls
Manufacturing PMI rises to 47.2 in August vs 46.8 in July
New orders, production sub-indexes decline
Construction spending falls 0.3% in July
By Lucia Mutikani
WASHINGTON, Sept 3 (Reuters) -U.S. manufacturing contracted at a moderate pace in August amid some improvement in employment, but a further decline in new orders and rise in inventory suggested factory activity could remain subdued for a while.
The survey from the Institute for Supply Management (ISM) on Tuesday also showed manufacturers continuing to pay higher prices for inputs last month. It did not change expectations that the Federal Reserve will cut interest rates by 25 basis points when it kicks off its long awaited easing cycle this month.
"Input price pressures moved up modestly to the highest in three months, but they are not so high in our judgment to threaten continued slow disinflation," said Conrad DeQuadros, senior economic advisor at Brean Capital. "No bar to a September rate cut here but nothing to push the Fed to a half-point cut either."
The ISM said its manufacturing PMI rose to 47.2 last month from 46.8 in July, which was the lowest reading since November. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.3% of the economy.
The PMI remained below the 50 threshold for the fifth straight month, but was above the 42.5 level that the ISM said over time indicates an expansion of the overall economy.
Five manufacturing industries, including primary metals, furniture and computer and electronic products, reported growth last month. Machinery, textile mills, transportation equipment as well as electrical equipment, appliances and components were among the 12 industries reporting contraction.
The PMI and regional factory surveys have, however, consistently overstated manufacturing weakness.
So-called hard data on manufacturing production and business spending on equipment suggest the sector has been largely treading water, as demand for goods has not collapsed despite hefty rate hikes from the U.S. central bank. The Fed is expected to start cutting rates at its Sept. 17-18 policy meeting.
Comments from respondents in the survey were mixed. Chemical products makers reported "a noticeable slowdown in business activity." Machinery manufacturers described new order intake as "sluggish at best." But miscellaneous goods manufacturing said that "new orders continue to be strong."
Primary metals manufacturers reported that order books remained "strong for now," and were "running overtime to keep pace as hiring hourly employees has been difficult."
Stocks on Wall Street were trading lower. The dollar rose against a basket of currencies. U.S. Treasury yields fell.
WEAK ORDERS
The ISM survey's forward-looking new orders sub-index fell to 44.6 last month from 47.4 in July.
Output declined further, with the production sub-index slipping to 44.8, the lowest level since May 2020, from 45.9 in July. The ISM said the low level of production execution was "putting additional pressure on profitability."
Despite weak demand, manufacturers faced higher prices for inputs, likely reflecting soaring freight rates.
The survey's measure of prices paid by manufacturers increased to 54.0 from 52.9 in July a sign that raw materials prices increased for the eighth straight month, reversing eight consecutive months of decreases.
That suggests goods deflation has probably run its course for now, but will probably not have a material impact on inflation, which is slowing. Goods prices were unchanged in July after falling for two straight months.
The measure of supplier deliveries fell to 50.5 from 52.6 in the prior month. A reading above 50 indicates slower deliveries.
Factory employment contracted, though the pace slowed. The survey's manufacturing employment measure rose to 46.0 from 43.4 in July. Companies continued to reduce head counts through layoffs, attrition and hiring freezes, the ISM said.
This measure has not been a reliable predictor of manufacturing payrolls in the government's closely watched employment report.
According to a Reuters survey of economists, manufacturing employment was likely unchanged in August after edging up by 1,000 jobs in July. Overall nonfarm payrolls were forecast increasing by 160,000 positions after rising 114,000 in July.
The unemployment rate was estimated to have fallen to 4.2% from near a three-year high of 4.3% in July.
A second report from the Commerce Department's Census Bureau on Tuesday showed construction spending dropped 0.3% in July after being unchanged in June as higher mortgages and increased supply weighed on single-family homebuilding. Construction spending increased 6.7% year-on-year in July.
Investment in residential construction fell 0.4%, with outlays on new single-family construction projects plunging 1.9%. A surge in mortgage rates in the spring chilled homebuilding and sales, leading to an inventory overhang in some regions. The excess supply and weak demand has forced builders to hold back breaking ground on new projects.
Single-family homebuilding dropped to a 16-month low in July, with inventory near levels last seen in early 2008.
Reporting by Lucia Mutikani; Editing by Paul Simao, Alexandra Hudson
ताजातरीन समाचार
अस्वीकरण: XM Group के सत्व केवल निष्पादन वाली सेवा और हमारी ऑनलाइन व्यापार सुविधा में पहुँच प्रदान करते हैं, ताकि व्यक्ति वेबसाइट पर या उसके जरिए उपलब्ध सामग्री को देख सके और/या उसका उपयोग कर सके। इसका प्रयोजन इसे बदलना या विस्तार देना नहीं है, न ही वह इसे बदलता या विस्तार देता है। इस तरह की पहुँच हमेशा ही निम्नलिखित के अधीन रहेगी: (1) नियम और शर्तें; (2) जोखिम चेतावनियाँ; और (3) पूर्ण अस्वीकरण। इसलिए ऐसी जानकारी सामान्य सूचना से अधिक कुछ भी नहीं है। विशेष रूप से, कृपया इससे अवगत रहें कि हमारी ऑनलाइन व्यापार सुविधा की सामग्रियाँ न तो किसी चीज का अनुरोध करती हैं, न ही वित्तीय बाजारों में प्रवेश करने की पेशकश ही करती हैं। किसी भी वित्तीय बाजार में व्यापार करने के साथ आपकी पूँजी को उल्लेखनीय जोखिम है।
हमारी ऑनलाइन व्यापार सुविधा में प्रकाशित सभी सामग्रियाँ शैक्षणिक/सूचनात्मक प्रयोजनों मात्र के लिए हैं, और इनमें वित्तीय, निवेश टैक्स या व्यापार सलाह और सुझाव नहीं हैं - न ही ऐसा समझना चाहिए कि इनमें ये सब हैं; न ही इनमें हमारी व्यापार कीमतों का अभिलेख है; न ही इनमें किसी वित्तीय उपकरण में लेन-देन करने का निमंत्रण या अनुरोध है; न ही ये आपको अवांछित वित्तयी प्रोमोशन पेश करती हैं।
इस वेबसाइट में मौजूद कोई भी तृतीय पक्षीय सामग्री, तथा XM द्वारा तैयार की गई सामग्रियाँ, जैसे: अभिप्राय, समाचार, अनुसंधान, विश्लेषण, कीमतें और अन्य सूचनाएँ या तृतीय पक्षों की साइटों के लिंक, "जैसा-है-वैसा" के आधार पर बाजार के बारे में सामान्य टिप्पणी के रूप में उपलब्ध कराई गई हैं, और वे निवेश हेतु सलाह नहीं हैं। जिस हद तक कीसी सामग्री को निवेश अनुसंधान मान लिया जाता है, उस हद तक आपको ध्यान में रखना होगा और इसे स्वीकार करना होगा कि वह सामग्री इस उद्देश्य से और निवेश अनुसंधान की स्वतंत्रता को बढ़ावा देने के लिए कानूनी आवश्यकताओं के मुताबिक, तैयार नहीं की गई है, और इसलिए उसे प्रासंगिक कानूनों और विनियमों के तहत विपणन संप्रेषण माना जाएगा। कृपया सुनिश्चित करें कि आपने गैर-आश्रित निवेश के बारे में हमारी सूचना को पढ़ और समझ लिया है। पीछे दी गई जानकारी के बारे में अनुसंधान और जोखिम चेतावनी यहाँ उपलब्ध है।
