For the 24th month in a row, manufacturing growth in the United States increased. However, in May, the rate slowed down from that of April, and didn’t live up to the expectations of analysts.
In fact, manufacturing in the U.S. slowed to its slowest pace in about two years. This resulted in concerns being raised about the country’s economic strength.
The Institute for Supply Management’s manufacturing index stood at 51.4 in May, down from a reading of 53.3 the previous month and below analysts’ expectations for a reading of 52. The index is at its lowest level since June 2003 when it registered 50.4…
The rate of growth in new orders in May continued to decline with only 11 of 20 industries reporting improvement compared with April, the report said. Also, the employment index failed to grow, ending 18 months of expansion, it said.
“While this represents the longest period of growth in the last 16 years, the data also indicates that the sector is losing momentum,” said a statement from Norbert Ore, chair of the ISM’s Manufacturing Business Survey Committee. “The rate of growth in new orders continues to decline. The manufacturing sector is definitely slowing.”
After 18 months in a row of hiring growth in the manufacturing sector, the employment subindex fell to 48.8. According to the ISM, manufacturing growth may end soon as a result of higher energy prices and a stronger dollar, which makes U.S. goods more expensive to people in other countries.
Bond prices rose upon the release of the ISM’s report. Benchmark Treasury 10-year yields dropped to their lowest since April of last year at 3.91%
Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.
