- 2023-08-11
The U.S. manufacturing PMI fell below expectations for the ninth month in a row in July
The Institute for Supply Management (ISM) released data on August 1, local time, showing that the manufacturing purchasing managers index (PMI) was 46.4 in July, which has been below the 50-line of expansion and contraction for nine consecutive months, and is the longest contraction cycle since 2009.
The PMI rose to 46.4 in July, up from 46 in June but still below market expectations.
The forward-looking new orders component of the ISM survey rose to 47.3 from 45.6 in June, the highest reading since October 2022. A gauge of prices paid by manufacturers rose to 42.6 from 41.8 in June, but remained low. According to the ISM report, the delivery performance of manufacturing organizations' suppliers has accelerated for ten consecutive months, and commodity inflation in the economy has slowed sharply.
The ISM survey also showed that a gauge of factory employment fell to 44.4 from 48.1 in June, the lowest reading since July 2020. The survey showed that factories increased their job cuts in July due to weak demand. While the indicator is unreliable in predicting the government's nonfarm payrolls data, it is consistent with expectations that job growth will slow.
Us media analysis believes that although the US manufacturing PMI is still sluggish in July, the increase in new orders indicates that the market demand for goods is increasing and will stimulate factories to increase inventories. Moreover, a sharp slowdown in commodity inflation has helped to "cool" headline inflation somewhat.
The Federal Reserve Board announced on June 26 that it would raise the target range for the federal funds rate by 25 basis points to 5.25% to 5.5%, the highest level since 2001.