US ISM manufacturing index falls unexpectedly in July
The US ISM manufacturing index ticked lower in July, falling from 53.5 in June to 52.7, below consensus expectations for a stable reading.
The slight drop brought the index to its lowest level since April this year, although the decline was driven by components that analysts believe to be less indicative of future growth.
Production rose from 54.0 to 56.0, registering its strongest level since April, while new orders edged higher from 56.0 to 56.5 to mark their strongest reading for the year to date.
Employment declined 2.8 points to 52.7, a drop that analysts had expected given early indications from regional data, while inventories fell from 53.0 to 49.5 and supplier deliveries continued to be plagued by a sluggish demand, which saw the sub-index tick just 0.1 point higher to 48.9.
Price pressures fell from 49.5 to 44.0, while export demand pulled back from 49.5 to 48.0 last month.
“Overall, we view the details of the July ISM as a bit more positive than the headline index would suggest, but expect domestic manufacturing to remain sluggish in the third quarter,” analysts at Barclays said in a note on Monday.