U.S. manufacturing fell in August for 1st time in 3 years

Sept. 3 (UPI) -- The manufacturing sector in the United States contracted last month for the first time in three years, an industry report said Tuesday.

The Institute for Supply Management said the Purchasing Managers' Index for the month of August, fell 2.1 percent to 49.1 percent. Anything below 50 percent of the PMI, which measures the prevailing direction of economic trends in manufacturing, is considered a contraction in the sector.

Timothy R. Fiore, chair of the ISM's manufacturing business survey committee, said while the United States' trade conflict with China is a concern, new trade orders are a greater worry.

"Respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders," Fiore said in a statement.

"Respondents continued to note supply chain adjustments as a result of moving manufacturing from China. Overall, sentiment this month declined and reached its lowest level in 2019."

Accompanied indexes for August fell nearly across the board. The New Orders Index decreased 3.6 percent last month to 47.2 percent, the Production Index slipped 1.3 percent, the Employment Index 4.3 percent and Supplier Deliveries Index almost 2 percent.

The Inventories Index increased to nearly 50 percent and the Prices Index to 46 percent.

"Comments from the panel reflect a notable decrease in business confidence," Fiore said. "August saw the end of the PMI expansion that spanned 35 months, with steady expansion softening over the last four months."

The Dow Jones Industrial Average dropped 300 points early Tuesday. New 15 percent tariffs on certain Chinese exports took effect Sunday.