Two significant indicators of U.S. manufacturing showed a contraction in August, suggesting a potential slowdown in the broader industry.
The report revealed a decline in new orders and stagnant shipments. Employment levels experienced a decrease, and hours worked significantly dropped. Input price pressures increased at a slower rate, while selling prices remained relatively unchanged.
Despite these unfavorable readings, companies harbor optimism that business conditions will improve in the next six months.
A recent study indicated an overall decrease in manufacturing activity due to slower growth in new orders and shipments. Employment within the sector also contracted this month.
Both main price indexes, prices paid and prices received, witnessed an increase on the inflation front.
In contrast to their New York counterparts, regional manufacturers expressed concerns about deteriorating conditions in the upcoming months.
In July, industrial production experienced a 0.6 percent decline, marking the first contraction since March. The decline was mainly driven by a significant drop in the index for motor vehicles and parts (-8 percent) as well as utilities (-3.7 percent).

The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI), which serves as an indicator of economic trends in the sector, has remained in contraction territory for the fourth consecutive month in July. Furthermore, this represents the 20th decline in activity over the past 21 months.
“Firms expect the market to improve following the November election,” says Chris Williamson, the chief business economist at S&P Global Market Intelligence.
However, John Belton, the portfolio manager at Gabelli Funds, believes that the ISM’s latest manufacturing print signals a possible recession.
“U.S. economic data has been slowing for the past few months, and the July ISM manufacturing survey revealed concerning forward-looking indicators with new orders and employment components significantly missing expectations and suggesting recessionary figures,” notes Belton in an email to The Epoch Times.
In terms of the manufacturing industry, Apollo’s chief economist Torsten Slok stated that the United States is currently witnessing an industrial renaissance, with manufacturing capacity experiencing growth after decades of decline, thanks to increased public and private investments.
Discover more from Tension News
Subscribe to get the latest posts sent to your email.