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ISM US Manufacturing Index Indicates Slower Expansion in June

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The Institute for Supply Management's US manufacturing index fell to 53.3 in June from 54.0 in May, compared with expectations for a smaller drop to 53.9 reading in a survey compiled by Bloomberg as of 7:35 am ET, indicating a slower pace of expansion.

There were declines in the readings for new orders, production, prices and order backlogs, but a gain in employment reading.

The monthly national manufacturing reading from the Institute for Supply Management is reported as a headline index, with readings above 50 indicating expansion and those below 50 indicating contraction. Component indexes measure new orders, production, employment, and prices.

An increase in the index further above 50 is considered a sign of a strong US manufacturing sector, generally a positive for manufacturing industry stocks. However, if that strength comes with rising input prices due to shortages, that could be a negative for stocks as well as bonds.

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