US manufacturing mired in weakness, economy heading for slowdown
By Lucia Mutikani
WASHINGTON (Reuters) — U.S. manufacturing remained subdued in November, with factory employment declining further as hiring slowed and layoffs increased, more evidence that the economy was losing momentum after robust growth last quarter.
The survey from the Institute for Supply Management (ISM) on Friday followed on the heels of data on Thursday showing moderate growth in consumer spending and subsiding inflation in October. Economic activity is cooling as higher interest rates crimp demand. Most economists, however, do not expect a recession next year and believe the Federal Reserve will be able to engineer the hoped-for «soft landing.»
Speaking during an event at Spelman College in Atlanta on Friday, Federal Reserve Chair Jerome Powell said «we are getting what we wanted to get» out of the economy.
The ISM said that its manufacturing PMI was unchanged at 46.7 last month. It was the 13th consecutive month that the PMI stayed below 50, which indicates contraction in manufacturing. That is the longest such stretch since the period from August 2000 to January 2002.
Some economists believed that the United Auto Workers strike, which ended in late October, continued to have an impact on the PMI. A rebound anytime soon is unlikely as manufacturers in the ISM survey mostly described inventories as bloated.
«This implies the goods sector overestimated demand and production could slow further in the next few months, though that too could reflect lingering strike effects if auto parts piled up when production was idled,» said Will Compernolle, macro strategist at FHN Financial in New York.
Economists polled by Reuters had forecast the index creeping up to 47.6. According to the ISM, a PMI reading below 48.7
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