US factory output at three-year low
US manufacturing activity contracted for the first time in three years, further denting confidence in a global economy that is already feeling the effects of the eurozone debt crisis and China’s economic slowdown.
In a shock to economists who were expecting manufacturing growth to slow moderately, the Institute for Supply Management’s survey on the US industrial sector reported a large decline in activity from 53.5 in May to 49.7 in June – its lowest level since the recession ended in mid-2009.
Any reading in the ISM index below 50 indicates a contraction in activity, while above 50 signals an expansion. David Semmens, economist at Standard Chartered described the number as a “really terrible” result.
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