US manufacturing slump continues into 10th month
The slump in US manufacturing activity continued for a 10th consecutive month in August amid ongoing softness in new orders, survey data showed on Friday, with some signs pointing to an improving situation. The Institute for Supply Management's (ISM) manufacturing index came in higher than expected at 47.6 percent in August, up from 46.4 percent a month earlier. The continued slowness in new manufacturing orders aligns with recent inflation figures, which showed a contraction in the prices of goods, while those of services continued to rise. The Federal Reserve has been on an aggressive campaign since March last year to bring down high inflation through interest rate hikes, which hits consumer demand. "The August composite index reading reflects companies managing outputs appropriately as order softness continues, but the month-over-month increase is a sign of improvement," ISM survey chief Timothy Fiore said in a statement. The figure was 1.0 percentage points higher than the median expectation of economists surveyed by MarketWatch. While it marked a sharp improvement, the August figure was still firmly below the 50-percent threshold indicating growth in the sector. "The manufacturing ISM index improved more than expected in August, to the highest level since February," Rubeela Farooqi, High Frequency Economics's chief US economist wrote in a note to clients. But she added that "higher borrowing costs and a further tightening in credit conditions could be headwinds going forward." (AFP)