U.S. Factory Activity Slows Amid Tariff Threats
The United States saw factory activity grow at a slower pace in February (The Wall Street Journal, subscription).
The numbers: The Institute for Supply Management’s purchasing managers’ index of manufacturing activity fell from 50.9 in January to 50.3 in February. A score above 50 indicates that activity is expanding, while a score below 50 indicates that activity is contracting.
- Prior to January, the manufacturing sector had spent more than two years below the 50 mark, so while February’s numbers signaled a slowdown, they remained in positive territory.
The details: According to Timothy R. Fiore, chairman of the ISM Manufacturing Business Survey Committee, the slowdown came as demand fell somewhat during the month, while production leveled off. At the same time, workforces shrank as businesses laid off workers or experienced attrition.
The big picture: Many respondents to the ISM survey cited tariffs, voicing concerns about rising prices from suppliers that were driving up costs.
- “Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts,” said Fiore.