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NEW YORK • A measure of manufacturing activity in the United States unexpectedly dropped last month to its lowest level since October 2016, a sign that US President Donald Trump's trade war with China is weighing on the economy. 39; economy.
The Institute for Supply Management's (ISM) Purchasing Managers Index (PMI) fell from 52.8 to 52.1, exceeding the median forecast of 53 in the US. Bloomberg survey, but lying above the 50 mark indicating expansion.
According to a report released yesterday, three of the five components declined, including production, inventories and deliveries from suppliers. Eleven of the 18 manufacturing industries recorded growth.
The lowest ISM index of Mr Trump's presidency – after a 14-year high in August this year – follows further economic data suggesting that the sector was on drier ground even before the latest price increase between the United States and China.
The PMI of another plant released yesterday by IHS Markit has also fallen, returning to its lowest level since 2009.
Producers, who were already suffering from slowing global growth and rising inventories, could see additional spillover after Trump's threat to impose tariffs on all imports from Mexico. Persistent weakness would weigh on economic growth and could be a factor in pushing the Federal Reserve to cut interest rates, as investors and some economists expect.
The ISM production indicator dropped to 51.3 in May, its lowest level since August 2016, even though the arrears indicator fell to its lowest level in two years . At the same time, the measurement of new orders has increased, as has the employment gauge. The measure of exports increased to above 50, while the import gauge fell for the third month to reach a two-year low of 49.4.
BLOOMBERG
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