The US manufacturing sector shrank in June for the eighth consecutive month as production, employment and prices all declined, a recent report found.
The Purchasing Managers Index (PMI), which measures the month-over-month change of economic activity in the manufacturing sector, dropped to 46% in June from 46.9% in May. This puts factory activity at its lowest level since May 2020, during the first months of the coronavirus pandemic, according to data released by the Institute for Supply Management.
The readings below 50, which started eight months ago and are a strong indicator that that the sector is contracting, is the longest since the Great Recession, Bloomberg reported.
The manufacturing sector, which accounts for 11.1% of the economy, shrank at an annual rate of 5.3% in the first quarter, according to government data released last week.
However, some room for strength remained, amid solid demand for items such as transportation equipment, machinery, as well as electrical equipment, home appliances and components.
The manufacturing sector faces a blow from the Federal Reserve raising interest rates by 500 basis points through March 2022, when it launched its fastest monetary-tightening campaign in more than 40 years.
