US manufacturing mired in weakness; factory employment declines

investing.com:

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 in October. Economic activity is cooling as higher interest rates crimp demand. Most economists, however, do not expect a recession next year.

«It reinforces anecdotal evidence and other surveys suggesting a slowing economy so far in the fourth quarter,» said Will Compernolle, macro strategist at FHN Capital in New York.

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.

A rebound anytime soon is unlikely as manufacturers in the ISM survey mostly described customer inventories as bloated.

Economists polled by Reuters had forecast the index creeping up to 47.6. According to the ISM, a PMI reading below 48.7 over a period of time generally indicates a contraction of the overall economy. The economy, however, continues to expand, growing at a 5.2% annualized rate in the third quarter.

Some economists believed that the United Auto Workers strike, which ended in late October, continued to have an impact on the PMI. Indeed, makers of fabricated metal products reported that «automotive sales (are) still impacted by (the) UAW strike,» adding they were «still waiting for orders to come in.»

Three industries —