American factories are still growing, but the enthusiasm is fading. The Institute for Supply Management’s June manufacturing PMI came in at 53.3, down from 54.0 in May and missing economist expectations that called for the reading to hold steady.
The number is still above 50, the dividing line between expansion and contraction.
The numbers tell a story of slowing momentum
Look at the subindexes and the picture gets clearer. New Orders fell to 56.0 from 56.8 in May, suggesting that while demand hasn’t collapsed, the pipeline of incoming work is thinning out. Production dropped more sharply, sliding to 52.2 from 54.3, a two-point decline that indicates factories are pulling back on output.
Then there’s the Prices Index, which is doing something unusual: falling fast but staying high. It plunged to 73.0 from 82.1, a drop of more than nine points in a single month.
