Sunday, September 4, 2011

US manufacturing output 'slows'

US manufacturing output slowed to its lowest rate of growth in two years in August, a report has said.

The Institute for Supply Management's (ISM) index of national factory activity declined to 50.6 last month from 50.9 in July.

With a reading of 50 or above indicating growth, output is still expanding. However, it has now slowed for six months in a row, said the ISM.

Its August reading is the worst since July 2009.

However, analysts had been expected worse figures for last month.

Unemployment concerns

Ian Shepherdson, an economist at High Frequency Economics, said he was pleased that the ISM data had not shown a contraction.

"To call this a relief is something of an understatement," he said. "It could have been horrendous."

A growing number of analysts now expect the US central bank, the Federal Reserve, to announce new measures to help boost the economy follow its next meeting at the end of this month.

The manufacturing sector has been seen as one of the best performing parts of the US economy, helped by higher exports.

Economists' concern has instead focusing on weak consumer spending in the face of high unemployment, which stands at more than 9%.

However, while official figures showed that consumer spending fell by 0.1% in June, it rose 0.8% in July, recent data showed.

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