U.S. manufacturing activity slowed in September as growth in new orders moderated sharply, but American factories hired more workers, pointing to sustained strength in the sector.
Data revealed Monday by the Institute for Supply Management (ISM) showed its index of national factory activity dropped 1.5 points to a reading of 59.8 last month from 61.3 in August, which had been the highest since May 2004. A reading above 50 indicates growth in manufacturing, which accounts for about 12% of the stateside economy.
The ISM continued to describe demand as remaining "robust." The ISM also noted that "the nation's employment resource and supply chains continued to struggle, but to a lesser degree." It said factories continued to be "overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations."
Washington last week slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The U.S. and China had already imposed tariffs on $50 billion worth of each other's goods.
While data have suggested the tariffs have had little impact on the economy so far, analysts warn that the import duties could disrupt supply chains, undercut business investment and slow the economy's momentum. The economy south of the border grew at a 4.2% annualized rate in the second quarter, almost double the 2.2% in the January-March period.
The ISM's new orders sub-index fell to a reading of 61.8 last month from 65.1 in August. A measure of export orders, however, rose last month. The survey's employment measure rose to 58.8, the highest reading since February from 58.5 in August.
