NEW YORK – The ailing U.S. manufacturing sector contracted for a ninth straight month in April but showed signs of stabilizing as a key index of business activity rose for the third month in a row, an industry group said Tuesday.
In a report that could cloud hopes for further aggressive interest rate cuts from the U.S. Federal Reserve in the months ahead, the National Association of Purchasing Management (NAPM) said its monthly gauge of industrial activity rose to 43.2 in April from 43.1 in March, but below expectations for 43.8.
"The manufacturing sector continued to contract in April. As the sector is struggling to gain a foothold that will reverse the decline, it is encouraging that pricing pressures appear to be moderating and inventory liquidation has accelerated," the NAPM report said.
Manufacturing, which accounts for about one-fifth of the overall economy, has suffered the most from the current U.S. economic slowdown, which the Fed has attempted to forestall with two percentage points of interest rate cuts this year.
NAPM surveys purchasing managers at over 350 companies nationwide on their views every month. A number below 50 indicates economic contraction; anything above 50 indicates growth, not seen since July 2000. The index hit a near-decade low in January at 41.2.