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Economic news
01.10.2024

U.S. manufacturing activity continues to contract in September - ISM

A report from the Institute for Supply Management (ISM) showed on Tuesday the U.S. manufacturing sector’s activity contracted again in September at a similar pace as in August.

The ISM's index of manufacturing activity - the manufacturing PMI - checked in at 47.2 per cent in September, unchanged from an unrevised August reading. The latest reading indicated shrinkage in the U.S. factory sector for the sixth straight month.

Economists had anticipated the indicator to improve to 47.5 per cent.

According to the report, the New Orders Index climbed 1.5 percentage points to 46.1 per cent last month but remained in contraction territory for the sixth consecutive month. In addition, the Production Index jumped 5.0 percentage points to 49.8 per cent, staying in contraction territory for the fourth straight month. The Supplier Deliveries Index increased 1.7 percentage points to 52.2 per cent, marking the third consecutive month of slower deliveries.

Meanwhile, the Employment Index dropped 2.1 percentage points to 43.9 per cent, indicating that employment shrank in September for the fourth month in a row. The Inventories Index tumbled 6.4 percentage points to 43.9 per cent, suggesting manufacturing inventories returned into contraction territory after a one-month expansion in August.

On the price front, the Prices Index declined 5.7 percentage points to 48.3 per cent, indicating that raw materials prices fell in September after eight straight months of gains.

Commenting on the September data, Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted that demand continued to be weak, output declined, and inputs stayed accommodative. “Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy - which the U.S. Federal Reserve addressed by the time of this report - and election uncertainty,” he explained.

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