US Manufacturing Growth Slows to 54.6 as ISM PMI Misses Forecasts

The Institute for Supply Management (ISM) reported a slower expansion in the US manufacturing sector for August, as its Manufacturing PMI came in at 54.6, below the forecast of 55.2.

This reading indicates a moderation in growth compared to expectations, and while still above the threshold that separates growth from contraction, it suggests that headwinds such as persistent inflation and higher borrowing costs are beginning to impact activity.

The new orders component, a leading indicator, likely softened, reflecting cautious demand from both domestic and international markets.

The data arrives at a critical juncture for the US economy, as the Federal Reserve weighs its next policy moves. A softer PMI reading could reinforce the case for a pause in interest rate hikes, as policymakers balance the need to curb inflation against the risk of slowing growth.