US manufacturing growth slows to lowest point in two years amid consumer spending decline
The ISM noted that seven industries had contracted, including furniture, textiles and wood
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U.S. manufacturing growth in September slowed to its lowest point in two years, nearing stagnation due to a decline in orders, according to a gauge released on Monday.
The Institute for Supply Management's manufacturing survey showed a nearly 2-point drop to 50.9%, dropping below expectations and reaching the lowest growth since May 2020, according to the data released on Monday. The index shows an order contract for the third time in four months.
Moreover, new orders reached the lowest point since the pandemic, contracting more than 4 points to 47.1%, indicating that consumer spending is declining.
"Following four straight months of panelists’ companies reporting softening new orders rates, the September index reading reflects companies adjusting to potential future lower demand," said Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee, in a statement, according to Bloomberg.
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The Institute for Supply Management reported on Monday that manufacturing growth during the month of September reached its lowest point in two years. (George Frey/Getty Images / Getty Images)
He added, "The U.S. manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began."
The survey reported that nine manufacturing industries showed growth last month, including mineral products, machinery and plastics. ISM reported that seven industries contracted, such as furniture, textiles and wood.
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Factory employment also declined as there was a notable increase in hiring freezes across the manufacturing sector.
However, Fiore stated, "Markedly absent from panelists' comments was any large-scale mentioning of layoffs; this indicates companies are confident of near-term demand."