The US ISM Manufacturing PMI data reveal a worse-than-expected index reading of 48.1, as opposed to the market consensus of 49.2 and the previous reading of 48.3. Construction spending data also showed that the amounts that builders spent on construction projects fell by 0.8%, against the market consensus of a 0.3% growth and a growth of 0.5% in the previous month.
Traders on the Dow Jones Industrial Average have responded negatively to the news, and the Dow has plunged to 27,895 as at the time of writing and is still falling.
The drop in the US ISM Manufacturing PMI data show a clear contraction in manufacturing activity in the United States. The Institute of Supply Management, the agency which conducts the survey of business managers in the manufacturing sector of the US, also pointed out that new orders, supplier deliveries and raw materials inventories were all decreasing. The survey report also indicated a contraction of imports and exports as well as price decreases, which clearly show that the US-China trade spat is beginning to hit home. However, the overall economy grew for the 127th month, albeit at a slower pace.