Input Stories

U.S. manufacturing activity slowed for the second month in a row in May, lower than expected (Reuters, subscription).

What’s going on: “The Institute for Supply Management’s manufacturing purchasing managers index for May fell to 48.7 from 49.2 in April, the research group said Monday, noting an increase in references to ‘softening’ among survey respondents. It was both the second straight decline and the second month below the 50 level that separates growth from contraction.”

• Reuters-polled economists had forecast a PMI of 49.6.
• Any number above 50 indicates growth.

New orders: The index for new orders, a gauge of future demand, was 45.4 in May, lower than both April’s 49.1 and March’s 51.4.

Why it’s happening: The output measure has contracted for 18 of the past 19 months, “as high interest rates resulting from Federal Reserve monetary policy tightening curbed demand for goods.”

What it means: “Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions,” said Tim Fiore, ISM’s PMI survey chair, in a press release (Barron’s).