WASHINGTON (dpa-AFX) - Manufacturing activity in the U.S. unexpectedly contracted at a slightly faster rate in the month of July, according to a report released by the Institute for Supply Management on Friday.
The ISM said its manufacturing PMI edged down to 48.0 in July after inching up to 49.0 in June with a reading below 50 indicating contraction. The dip surprised economists, who had expected the index to creep up to 49.5.
With the unexpected decrease, the manufacturing PMI fell to its lowest level since hitting 46.9 in October 2024.
The pullback by the headline index came as the employment index fell to 43.4 in July from 45.0 in June, suggesting the manufacturing sector lost jobs at a faster rate.
The supplier deliveries index also slumped to 49.3 in July from 54.2 in June, indicating faster delivery performance after seven consecutive months in slower territory.
The ISM noted slower deliveries are typical as the economy improves and customer demand increases.
Meanwhile, the report said the new orders index crept up to 47.1 in July from 46.4 in June, and the production index rose to 51.4 in July from 50.3 in June.
The price index tumbled to 64.8 in June from 69.7 in June, indicating raw materials prices increased for the 10th straight month but at a slower rate.
Next Tuesday, the ISM is scheduled to release a separate report on service sector activity in the month of July. The services PMI is currently expected to rise to 51.5 in July from 50.8 in June, with a reading above 50 indicating growth.
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