US Manufacturing Slump Worsens as Price Pressures Remain Subdued

US manufacturing activity continued to decline in June, reaching levels last seen during the initial wave of the COVID-19 pandemic. The Institute for Supply Management (ISM) survey showed that factories resorted to layoffs as shrinking activity persisted. However, price pressures at the factory gate remained subdued, providing a silver lining for the economy. The ISM's manufacturing PMI dropped to its lowest reading since May 2020, marking the eighth consecutive month of contraction. While some industries, such as transportation equipment, showed growth, overall weak demand and cautious inventory management are dampening the sector. On the other hand, housing construction rebounded in May, contributing to an increase in overall construction spending.