Although both the manufacturing and non-manufacturing sectors of the U.S. economy continued to grow in July, the pace of growth, compared to June, was quite different.
The Institute for Supply Management's (ISM) index of business activity for non-manufacturers -- a category that includes mining, construction, utilities, finance and insurance -- fell 2.2 percentage points last month as growth slowed, the Tempe, Ariz.-based group reported on August 3. The index for non-manufacturers was 54.8% in July. Earlier this week, ISM reported its business activity index for manufacturers had risen nine-tenths percent in July to 54.7%. With both indexes, a figure above 50% indicates that the sector generally is expanding; a figure below 50% signals the sector is contracting.
Among non-manufacturers, new orders in July came in at a pace a full percentage point less than in June, a development that economists expected.
Although comments by ISM members on current business conditions were "mostly positive" last month, increased prices, fuel expenses and delivery costs remained "areas of concern," related Anthony Nieves, chair of ISM's non-manufacturing business survey committee and senior vice president for supply management at Hilton Hotels Corp.