Pace of U.S. manufacturing activity expected to slow further in August

The currently available quartet of district U.S. Federal Reserve Bank surveys and Markit Economics canvass of 600 companies nationwide suggest that the ISM Purchasing Managers' Index slipped to a four-month low of 51.8 in August. The index would be below the 53.0 May-July average and consistent with annualized real GDP growth in the neighborhood of 2.9%, says Societe Generale in a report to its clinte. 

With the Bureau of Labor Statistics' (BLS) update on the employment situation scheduled to be released three days hence, the employment diffusion index likely will receive considerable attention in the ISM's report. Hiring soundings in the above -cited reports suggest that the ISM employment gauge probably contracted by 0.8 point to 51.9 in August, hinting at a smaller rise in factory jobs that the 15,000 posted by government statisticians in July, adds SocGen. On the inflation front, reports of higher input prices are expected to narrow conside rably in ne xt wee k's re port. Available regional surve ys point to anothe r 5 .5 - point drop in the ISM input cost barometer to 38.5 - the softest reading since February.