U.S. Manufacturing's Growth Rate Slows In August

Although U.S. manufacturing grew for the 39th consecutive month in August, the rate of growth was slightly slower than it was during July, according to data released September 1 by the Institute for Supply Management (ISM). Its manufacturing business activity index edged down to 54.5% last month, two-tenths of a percentage point less than July's 54.7%.

An index figure above 50% indicates the manufacturing sector of the economy is expanding; a figure below 50% signals it is contracting.

Both new orders and manufacturing production grew at slower rates in August. The new orders index slipped 1.9 percentage points to 54.2%. The production index fell a single percentage point 56.6%.

However, manufacturers covered by ISM's monthly survey added workers at a faster rate in August than in July. The employment index rose 3.3 percentage points to 54.0%.

"The major concerns in manufacturing at this point are the continued upward pricing pressure that has existed for the past 13 months -- and some industries are experiencing a degree of inventory buildup," says Norbert J. Ore, chairman of ISM's manufacturing business survey committee.

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