The US manufacturing PMI fell further, and experts fear a recession is looming.
According to a Reuters report on the 3rd, data released by the US Institute for Supply Management (ISM) showed that the US manufacturing purchasing managers' index (PMI) fell further in June to the level last seen when the country was just recovering from the first wave of COVID-19. Economists have warned that a recession is looming, weighed down by rising borrowing costs and weak demand.
According to the ISM, the US manufacturing PMI fell to 46.0 in June from 46.9 in May, reaching its lowest level since May 2020. This means that the PMI has been below the 50 threshold for the eighth consecutive month, indicating that the US manufacturing sector is contracting. The contraction is the longest since the Great Recession. The forward-looking new orders sub-index of the ISM survey rose to a still-sluggish 45.6 from 42.6 in May as businesses and consumers became more cautious.
The ISM survey is consistent with recessionary trends. At present, US factories are facing higher borrowing costs due to the Fed's interest rate hike and inventory overhang due to weak market demand, which has led to a contraction in US manufacturing activity and forced factories to lay off workers. Andrew Hunter, an economist at Capital Economics, warned that the combination of these factors reinforced suspicions that the US economy was about to fall into recession.
