WASHINGTON – U.S. factories expanded again last month — a good sign for the economy. But pace of growth was down from June.
The Institute for Supply Management reports that its manufacturing index slipped to 56.3 from the June reading of 57.8. Still, anything above 50 signals that manufacturers are expanding, and America's factories have been on an 11-month winning streak.
U.S. factories have largely recovered from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods more expensive in foreign markets.
Factory orders, production and hiring all grew more slowly in July. Export orders also grew but at a slower clip.
Fifteen of 18 manufacturing industries reported growth in July, led by makers of plastic and rubber products.
The Commerce Department reported last week that orders for long-lasting factory goods rose in June at the fastest pace since July 2014. But the number was inflated by a surge in orders for commercial aircraft, which bounce around wildly from month to month.
And the Labor Department reports that factory hiring has been sputtering recently. Manufacturers added just 8,000 jobs from April through June, the weakest three-month performance since November 2016.
The U.S. economy — measured by gross domestic product — expanded at a 2.6 percent annual pace from April through June, up from a lackluster 1.2 percent in the first quarter.
Michael Pearce, U.S. economist at Capital Economics, said the July ISM manufacturing index reading "is consistent with GDP growth remaining above 2 (percent) going into the second half of the year."