ISM factory PMI edges up by less than expected in August

Factory sector activity in the States shrank at a slightly lower pace in August, the results of a closely followed survey showed.

But that was mostly due to rising levels of product inventory.

The Institute for Supply Management's manufacturing sector Purchasing Managers' Index edged up from a reading of 46.8 for July to 47.2 in August.

Economists had pencilled in a reading of 47.5.

A key subindex linked to companies' new orders slipped from 47.4 to 44.6, whilst that tracking production dipped from 45.9 to 44.8.

The subindex for the prices paid by companies edged up from 52.9 to 54.0.

For both the headline PMI and all subindices, the 50-point level marked the threshold between an expansion and a contraction.

Thomas Ryan at Capital Economics labelled the report "disappointing" as the impact of temporary disruptions in July had been expected to unwind.

He also noted the fresh drop in the subindex for new orders, even while pointing out that it remained above the sub-42 mark that has historically coincided with recessions.