Growth in the American manufacturing sector has slowed to its weakest pace in nearly two years, according to a closely watched survey that is bound to feed into uncertainty over whether the Federal Reserve will feel confident enough to raise interest rates next month.
Markit, the financial data group, said that its preliminary purchasing managers’ index slipped to 52.9 from 53.8 last month. Economists had been expecting the PMI reading to remain flat.
The main factor weighing on the headline index was a slowdown in manufacturing output growth from a three-month high recorded during July.
The latest rise in production volumes was the weakest since the weather-related slowdown recorded in January last year. Some respondents cited a cyclical slowdown in new business growth, as well as heightened uncertainty regarding the demand outlook this month.
The survey “highlights a lack of growth momentum and continued weak price pressures across the US manufacturing sector, which adds some fuel to the doveish argument as policymakers weigh up tightening policy in September,” Tim Moore, senior economist at Markit, said.