- Post 05 July 2012
- By Newsmax.com
Manufacturing in the U.S. unexpectedly contracted in June for the first time in almost three years, indicating a mainstay of the U.S. expansion may be faltering.
The Institute for Supply Management’s index fell to 49.7, worse than the most pessimistic forecast in a Bloomberg News survey, from 53.5 in May, the Tempe, Arizona-based group’s report showed today. Figures less than 50 signal contraction. Measures of orders, production and export demand dropped to three-year lows.
Assembly lines may be slowing as consumers temper purchases of vehicles and other goods and companies limit investments in new equipment. At the same time, export markets for manufacturers like DuPont Co. and Steelcase Inc. are finding it more difficult as Europe struggles with a debt crisis and Asian economies including China weaken.
“The investment picture is softening in the face of all the uncertainty,” Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York, said before the report. “Europe is already weighing on the manufacturing sector, and U.S. growth is decelerating.”
Stocks fell, following the biggest June rally since 1999 from the Standard & Poor’s 500 Index, and the ISM index fell to the lowest level since July 2009. The S&P 500 declined 0.3 percent to 1,357.66 at 10:21 a.m. in New York.
The median forecast in the Bloomberg survey called for a decline to 52. Estimates of 70 economists ranged from 50.5 to 53.5. The gauge averaged 55.2 in 2011 and 57.3 in the previous year. ...