ISM manufacturing index at 47.2%... Numbers below 50% signal the manufacturing sector is shrinking.
The numbers: A key barometer of U.S. factories was negative for the fifth straight month, signaling the manufacturing side of the economy is still in a deep slump.
The Institute for Supply Management’s manufacturing index edged up to 47.2% from an eight-month low of 46.8%. Numbers below 50% signal the manufacturing sector is shrinking.
“Demand remains subdued,” said Timothy Fiore, chairman of the ISM survey, “as companies show an unwillingness to invest in capital and inventory due to [high interest rates] and election uncertainty.”
ISM reports on manufacturers and service-oriented companies offer a window into the health of the economy. Economists polled by the Wall Street Journal had forecast the index to rise slightly last month.
Big picture: The prospect of lower U.S. interest rates is expected to give manufacturers a shot in the arm after a prolonged slump. The Federal Reserve is all but assured to start cutting rates in mid-September in response to a slowdown in inflation.
Lower borrowing costs would boost demand for cars, houses and other goods and make it cheaper for companies to borrow and invest.
Market reaction: The Dow Jones Industrial Average index fell in early Tuesday trade.
