U.S. manufacturing sector contracts for 3rd straight month, ISM says

Posted May 1st 2008 12:39PM by Joseph Lazzaro
Filed under: Bad News, Industry, Economic Data, Recession

Institute for Supply Management Manufacturing Index for April 2008 was unchanged at 48.6, compared to March 2008's reading, which was revised up 0.3, the institute announced Thursday.

Economists surveyed by Bloomberg News had expected the index to drop to 48.0 in April 2008.

Readings above 50 indicate economic growth; readings below 50, economic contraction.

With April 2008's 48.6 reading, the metric has indicated a contraction for three consecutive months.

Economist David H. Wang told BloggingStocks Thursday the April ISM stat "clearly shows the U.S. economy, from a factory activity standpoint, is growing at the slowest of levels."

Also, the employment index declined to 45.4% in April 2008 from 49.2% in March 2008. The prices index increased to 84.5% in April 2008 from 83.5% in March 2008.

Most components in the ISM manufacturing metric indicated the U.S. economy is contracting; only one, exports, indicated growth/expansion.

Economic Analysis: Another bearish ISM manufacturing data point for the U.S economy. Now below 50 for three straight months, the reading indicates a pronounced slowing of the economy, which was confirmed by the 0.6% Q1 2008 GDP growth rate announced by the U.S. Commerce Department Wednesday. Both business and consumer demand have slowed markedly in the past quarter, as the ripples from the housing / residential construction market slump continue to work their way through the U.S. economy.

Tags: GDP, Institute of Supply Management, inthenews, ISM, manufacturing, U.S. economy

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Reader Comments (Page 1 of 1)

5-01-2008 @ 1:11PM

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