Economic Report
June 1, 2011, 10:21 a.m. EDT
ISM manufacturing gauge tumbles in May
Third straight decline puts index at lowest level in one year
By Jeffry Bartash , MarketWatch
WASHINGTON (MarketWatch) â Growth in the U.S. manufacturing sector receded in May, according to a closely followed index released Wednesday.
The Institute for Supply Management said its manufacturing gauge fell to 53.5% in May from 60.4% in April, marking the third straight decline and the biggest one-month drop since 1984. Itâs also the lowest reading in one year.
Economists surveyed by MarketWatch had forecast the index to drop to 57.1%. Three months ago the index peaked at a seven-year high of 61.4%.
Although the manufacturing sector is not growing as fast as it was, the industry has still expanded for 22 straight months. Any reading over 50% indicates more manufacturing activity are expanding instead of shrinking.
Still, the decline in the ISM index is the latest in a stream of reports to show slowing in the U.S. manufacturing sector, the fastest-growing part of the economy since the recession ended in mid-2009. Regional reports from Philadelphia, New York and Chicago all showed a sharp slowdown in growth last month.
In recent action, U.S. stocks (CME:INDEX:SPX) extended their losses.
Fourteen of the 18 industries tracked by Tempe, Ariz.-based ISM expanded in May, down from 17 in April. Three industries â printing, furniture and food and beverage â contracted.
The ISMâs new orders index plunged 10.7 percentage points to 51.0%, while the production index sank 9.8 percentage points to 54.0.
The employment index, meanwhile, fell to 58.2% from 62.7% in April and the inventories gauge declined to 48.7% from 53.6%.
The ISM asks about 350 purchasing managers if their business got better or worse over the past month. These senior executives are involved in all sorts of decisions, including hiring, the purchase of raw materials, the delivery of supplies and the management of inventories.
Earlier, a report from ADP showed just 38,000 private-sector jobs created in May
June 1, 2011, 10:21 a.m. EDT
ISM manufacturing gauge tumbles in May
Third straight decline puts index at lowest level in one year
By Jeffry Bartash , MarketWatch
WASHINGTON (MarketWatch) â Growth in the U.S. manufacturing sector receded in May, according to a closely followed index released Wednesday.
The Institute for Supply Management said its manufacturing gauge fell to 53.5% in May from 60.4% in April, marking the third straight decline and the biggest one-month drop since 1984. Itâs also the lowest reading in one year.
Economists surveyed by MarketWatch had forecast the index to drop to 57.1%. Three months ago the index peaked at a seven-year high of 61.4%.
Although the manufacturing sector is not growing as fast as it was, the industry has still expanded for 22 straight months. Any reading over 50% indicates more manufacturing activity are expanding instead of shrinking.
Still, the decline in the ISM index is the latest in a stream of reports to show slowing in the U.S. manufacturing sector, the fastest-growing part of the economy since the recession ended in mid-2009. Regional reports from Philadelphia, New York and Chicago all showed a sharp slowdown in growth last month.
In recent action, U.S. stocks (CME:INDEX:SPX) extended their losses.
Fourteen of the 18 industries tracked by Tempe, Ariz.-based ISM expanded in May, down from 17 in April. Three industries â printing, furniture and food and beverage â contracted.
The ISMâs new orders index plunged 10.7 percentage points to 51.0%, while the production index sank 9.8 percentage points to 54.0.
The employment index, meanwhile, fell to 58.2% from 62.7% in April and the inventories gauge declined to 48.7% from 53.6%.
The ISM asks about 350 purchasing managers if their business got better or worse over the past month. These senior executives are involved in all sorts of decisions, including hiring, the purchase of raw materials, the delivery of supplies and the management of inventories.
Earlier, a report from ADP showed just 38,000 private-sector jobs created in May
