U.S. manufacturing shrank at its sharpest clip in more than three years in August, the third month of contraction in a row, and firms hired the fewest workers since late 2009, a survey on Tuesday showed.
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The Institute for Supply Management said its index of national factory activity fell to 49.6 in August from 49.8 in July.
The reading fell shy of the 50.0 median estimate in a Reuters poll of economists. A reading below 50 indicates contraction in the sector.
The index's employment component fell to 51.6, the lowest since November 2009, from 52.0 in July.
New orders, a forward-looking sub-index, fell to 47.1 in August, the worst showing since April of 2009. It stood at 48 in July.
The exports index ticked up to 47 last month from 46.5 in July but remained in contraction territory as recession in parts of Europe and slower growth in Asia sapped demand for U.S. goods.