Economic Report: ISM factory index stumbles for 10th consecutive month in August

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The numbers: A closely-watched index that measures U.S. manufacturing activity rose 1.2 points to 47.6 in August, according to the Institute for Supply Management on Friday.

Economists surveyed by the Wall Street Journal had forecast the index to rise to 46.6%. 

Any number below 50% reflects a shrinking economy. Manufacturing has contracted for 10 straight months, although the August level is the highest since February.

Key details: New orders slipped 0.5 points to 46.8%. Orders have contracted every month for the past year.

Production and employment picked up in August.

Only five of 13 manufacturing industries reported growth in August.

A separate gauge of manufacturing, the S&P Global U.S. manufacturing sector index, registered 47.9 in a final August reading, up from the flash estimate of 47, which was a two-month low.

Big picture: Manufacturing has been hurt by the Federal Reserve’s rapid push to raise interest rates and the weakening global economy.

What ISM said: “It feels like we’re moving towards stability,” said Timothy Fiore, chair of the ISM manufacturing survey committee.

What they are saying? “The recent upturn in the manufacturing PMIs in China, as policy support feeds through, suggests the U.S. ISM index could continue to rebound over the months ahead. That said, in an environment where the rest of the global economy still appears to be weakening and domestic demand growth looks set to slow, we doubt that a sustained recovery in manufacturing activity is on the cards,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

Market reaction: Stocks DJIA SPX were higher on Friday after the August job report. The 10-year Treasury note yield BX:TMUBMUSD10Y rose to 4.15%.

This article was originally published by Marketwatch.com. Read the original article here.

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