Continuous contraction in US manufacturing sector for the sixth month in a row, factory output index falls.

In August, the manufacturing activity in the United States shrank for the sixth consecutive month, with a decline in production indicating that the manufacturing sector is still in trouble. According to data released on Tuesday, the Institute for Supply Management's manufacturing index for August was 48.7, slightly higher than July's 48, but with mixed data, the overall index still remains in contraction territory. The factory output index fell by 3.6 points to 47.8, returning to the contraction zone for the first time in three months. The employment index increased slightly, but still remains at one of the weakest levels since the pandemic. At the same time, there are some optimistic signs in the outlook. The order index rose to the expansion zone for the first time since the beginning of the year. The new order index jumped by 4.3 points to 51.4, the biggest increase since the beginning of last year. The raw material price index dropped to 63.7, the lowest since February. This was a decrease of 4.9 points from the previous month, indicating that the price volatility caused by tariffs is diminishing. Despite the increase in import tariffs leading to higher costs, manufacturers are still benefiting from robust business investment and resilient household demand. ISM data also shows that order backlogs are decreasing at an accelerated rate, explaining why employment data is weak.