U.S. manufacturing activity slowed to a 2-1/2-year low in April amid a sharp dro...
WASHINGTON - U.S. manufacturing activity slowed to a 2-1/2-year low in April amid a sharp drop in new orders while construction spending unexpectedly fell in March, suggesting economic growth was moderating after surging in the first quarter.
The Federal Reserve kept U.S. interest rates unchanged on Wednesday, noting solid economic growth in the first quarter, and also holding out hope that inflation will rise toward the U.S. central bank’s 2 percent target. Economists polled by Reuters had forecast the ISM index dipping to 55.0 in April. The slowdown in manufacturing partly reflects sluggish global economies and continued uncertainty over the trade talks between the United States and China. A stockpile of unsold goods is also seen slowing manufacturing.
Machinery and transportation equipment manufacturers said they were also monitoring the situation on the U.S. southern boarder. Trump has repeatedly threatened to shut down the border because of a surge in illegal immigrants seeking to enter the United States. “The U.S. manufacturing sector remains under pressure,” said Sarah House, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “We expect the sector’s contribution to payrolls to be noticeably more minimal in the months ahead.”
The ADP report has a poor record of predicting the private payrolls component of the government’s employment report.
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