Activity in the US manufacturing sector contracted for the ninth consecutive month in July, as companies cut jobs in the face of weak demand.
The Institute for Supply Management said its index tracking factory activity edged up to a reading of 46.4 last month from 46 in June. A figure below 50 indicates that the sector is contracting. Economists had expected a reading of 46.8.
Timothy Fiore, chair of the ISM manufacturing business survey committee, said companies had indicated a slowdown in hiring as reduced production pushed them to “manage headcounts down” more than in previous months.
Demand for US workers continued to slow in June, reaching a two-year low and suggesting that the labour market is heading towards a soft landing.
There were about 9.58mn job vacancies on the last business day of June, slightly lower than a downwardly-revised figure of 9.61mn in May, the labour department said on Tuesday. The number of job openings, which economists consider to be a proxy for labour demand, was about in line with economists’ expectations, according to a Refinitiv survey.
Layoffs held steady at 1.5mn, while job quits dropped to 3.8mn, further indicating that the jobs market is slowing. They are considered more reliable figures than the volatile openings number.