Financial News: U.S. Manufacturing Index Unexpectedly Edges Down To Six-Mo

U.S. Manufacturing Index Unexpectedly Edges Down To Six-Month Low In May

06/02/2025 - 11:08:00 (RTTNews)

(RTTNews) - A reading on U.S. manufacturing activity unexpectedly edged slightly lower in the month of May, according to a report released by the Institute for Supply Management on Monday.

The ISM said its manufacturing PMI slipped to 48.5 in May from 48.7 in April, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.5.

With the unexpected decline, the manufacturing PMI dipped to its lowest level hitting 48.4 in November 2024.

The modest decrease by the headline index came as the new orders and production indexes increased but remained in contraction territory.

The new orders crept up to 47.6 in May from 47.2 in April, while the production index climbed to 45.4 in May from 44.0 in April.

The employment index also inched up to 46.8 in May from 46.5 in April but posted its fourth consecutive month of contraction after expanding in January.

Meanwhile, the report said the prices index edged down to 69.4 in May from 69.8 in April, indicating a modest slowdown in the pace of price growth.

"Looking at the manufacturing economy, 57 percent of the sector's gross domestic product (GDP) contracted in May, up from 41 percent in April," said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.

She added, "The share of manufacturing GDP registering a composite PMI calculation at or below 45 percent is a good metric to gauge overall manufacturing weakness; in May, this figure was 5 percent, a 13-percentage point decrease compared to the 18 percent in April."

On Wednesday, the ISM is scheduled to release a separate report on service sector activity in the month of May.

Economists currently expect the ISM's services PMI to inch up to 52.0 in May from 51.6 in April, with a reading above 50 indicating growth.

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