U.S. manufacturing activity contracted more sharply than expected last month, marking two years of decline.
According to industry survey data released Thursday, the decline was further exacerbated by continued weak demand and a continued decline in production.
The Institute for Supply Management (ISM) manufacturing index was 46.8 percent in July, down 1.7 percentage points from the previous month.
That was well below market expectations of 48 percent, according to Briefing.com, and marked the fourth consecutive month in which the reading fell below the 50-point mark that separates expansion from contraction.
News that the U.S. manufacturing contraction has deepened will likely bolster the argument made Wednesday by Federal Reserve Chairman Jerome Powell that the U.S. central bank could make its first interest rate cut “as soon as” September if data continues to point in the right direction.
The manufacturing industry has been suffering for two years due to the Biden administration’s erroneous economic policies that led to the worst inflation in almost five decades. After a year of doing absolutely nothing about rising prices, the Federal Reserve raised the benchmark interest rate to 5.25%-5.50%.
Before the rise in interest rates, manufacturing activity in the US began to plummet, entering a contraction unprecedented in the country’s history.
Manufacturing activity in the United States ended 2023 with a sharp decline, registering a contraction in December for the 14th consecutive month, according to data published by the professional federation ISM.
