Manufacturing Activity Falls

U.S. manufacturing activity fell to an eight-month low in July, primarily on a decline in new orders (Reuters).

What’s going on: “The Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI dropped to 46.8 last month, the lowest reading since November, from 48.5 in June.”

A reading below 50 indicates a decline in the manufacturing sector, which makes up 10.3% of the economy in the U.S.
Reuters-polled economists had predicted the PMI moving up to 48.8.

The details: The key index of new orders declined to 47.4 in July from 49.3 the month prior.

Output continued to fall, with the production barometer sliding to 45.9 from 48.5 in June.
Prices paid by manufacturers rose to 52.9 from 52.1 in June.

However … While “manufacturing has been undercut by higher interest rates, the situation is probably not as dire as suggested by sentiment surveys such as the ISM. So-called hard data from the government and Federal Reserve suggests the industry has stabilized.”