Manufacturing activity shrinks in June, ISM says--first time in three years
WASHINGTON (MarketWatch) — Manufacturing activity shrunk in June for the first time in three years as new orders dried up, according to a key report released Monday that points to a deteriorating U.S. economy.
The Institute for Supply Management’s manufacturing index fell to 49.7% from 53.5% in May, in the first reading below the 50% line indicating expansion or contraction since July 2009.
Of the 18 manufacturing industries, nine reported contraction and seven reported growth.
The 12.3 point drop in the new-orders index was the largest since the 12.4 point drop in October 2001 — just a month after the terrorist attacks on the World Trade Center.
"Clearly this is the biggest sign yet that the U.S. is catching the slowdown that is well underway in Europe and China,” said Paul Dales, senior U.S. economist at Capital Economics, in a note to clients. “But it is worth remembering that a reading of below 47.0 is required to be consistent with another recession. This means the index is still consistent with a growing economy, albeit at an annualized rate of a little below 1%.”
http://articles.marketwatch.com/2012-07-02/economy/32500432_1_manufacturing-activity-manufacturing-index-production-index
