Economy Continues Sluggish Expansion; Manufacturing Index Fell to Low in August
U.S. manufacturing grew more slowly in August, a research group reported yesterday, adding to other signs that the economic expansion continued to lose steam in recent weeks.</br></br>The Institute for Supply Management's index of manufacturing activity fell to 59 last month, its weakest reading of the year, from 62 in July. The figures are based on a survey of purchasing managers, with a reading above 50 indicating growth and a number below that level reflecting a decline.</br></br>The report followed other recent reports that have showed stalling job creation, weak income growth, slowing home sales, falling exports and slipping consumer confidence. Wal-Mart Stores Inc. and Target Corp. are among the companies that have lowered their sales forecasts for August.</br></br>"Clearly, the economy is still working its way through a soft spot," said Ken Kim of Stone & McCarthy Research Associates in an analysis for clients.</br></br>One bright spot in the economy is construction spending, which rose 0.4 percent in July from the month before to a record-high $997.2 billion annual rate, the Commerce Department reported yesterday. But part of the gain reflected activity that was delayed by wet weather in June, when construction spending was flat, analysts said. And some of the advance was the result of higher prices for building materials.