Manufacturing activity in the United States fell further in June, a survey showed on Monday, to a level not seen only in the economy when it was reeling under the weight of the first wave of the “Covid-19” pandemic.
The Institute for Supply Management said its manufacturing purchasing managers’ index fell to 46 points last month, down from 46.9 in May after May 2020. It was the eighth straight month the PMI remained below the 50 threshold, indicating the longest period of contraction in manufacturing since the Great Recession.
Economists polled by Reuters had expected the index to rise to 47 points. Manufacturing industries, which account for 11% of the U.S. economy, shrank at an annualized rate of 5.3% in the first quarter, government data showed last week.
However, there is still some strength, with strong demand for goods such as transport equipment and machinery, as well as electrical equipment, appliances and spare parts.
raise interest
Manufacturing industries have been hit by the Federal Reserve raising interest rates by 500 basis points since March 2022, when the US central bank began its strongest monetary policy tightening campaign in more than 40 years.
Costs shift from goods to services that consumers usually buy on credit. Companies are also carefully managing inventory in anticipation of weak demand. (Reuters)
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