The US ISM manufacturing PMI for August came in at 47.2, up from the previous month’s reading of 46.8 but below the consensus of 47.5, reflecting a slowdown in the pace of manufacturing contraction.
The report’s components revealed that the price index rose from 52.9 to 54.0, while the employment index also improved from 43.4 to 46.0. However, the overall decline was mostly driven by another monthly decline in new orders, as well as a decline in output.
Link to the August ISM Manufacturing PMI
“Demand remains weak, production has declined, and inputs have remained accommodative.” Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee, said:
“Demand remains weak, with businesses showing an unwillingness to invest in capital and inventory due to current federal monetary policy and electoral uncertainty.
US Dollar vs Major Currencies: 5 minutes
US Dollar Overlay Against Major Currencies Chart by TradingView
The US dollar, which was seeing mixed performance ahead of the ISM manufacturing PMI report, rose broadly after seeing slightly better-than-expected results.
Dollar bulls appear to have found some relief from the rise in employment and prices components, with the former bringing positive sentiment ahead of Friday’s non-farm payrolls report.
The US currency managed to hold onto most of its gains made after the PMI release, except against the Canadian dollar, where it moved sideways in the few hours following the report.
The construction spending report released at the same time showed a 0.3% monthly decline for July instead of the expected 0.1% gain while the RCM/TIPP consumer optimism index released a few minutes later showed a slight improvement.