Key manufacturing report slides into contraction territory, ISM says

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Source: MarketWatch

Key manufacturing report slides into contraction territory, ISM says

Published: Sept 1, 2016 10:56 a.m. ET

Manufacturing gauge at 7-month low as new orders, employment decline

By Steve Goldstein
D.C. bureau chief

A key report on U.S. manufacturing fell in August to a level indicating activity shrank, another sign of the difficulties in the factory sector.

The Institute for Supply Management said Thursday its manufacturing index in August fell to 49.4% from 52.6% last month, below the consensus expectation for a 52% reading. Any reading below 50% indicates contraction, and the index was below that level for the first time since February.
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Of the 18 different industries ISM measures, 11 shrank during the month. Key gauges on new orders, production and employment also were below the 50% mark.
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Even though the manufacturing industry is a much smaller part of the U.S. economy than it once was, the fact that it’s cyclical in nature means the sector is highly scrutinized as a bellwether.
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Steve Goldstein is MarketWatch's Washington bureau chief. Follow him on Twitter @MKTWgoldstein.

Read more: http://www.marketwatch.com/story/key-manufacturing-report-slides-into-contraction-territory-ism-says-2016-09-01

[elleng]

1. Central Bankers Hear Plea: Turn Focus to Government Spending.

GRAND TETON NATIONAL PARK, Wyo. — Central bankers who gathered here to discuss better ways of jump-starting slow economic growth received a surprising message from their lunchtime speaker on Friday: Stop. You’re making things worse.

Christopher A. Sims, a Nobel laureate in economic science, told the annual conference that increased government spending was required to lift the world’s major economies from stagnation. The pursuit of innovations in monetary policy, he said, is diverting needed attention from the inaction of fiscal policy makers.

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