The U.S. ISM manufacturing index dropped in May to 52.1 from April’s 52.8, coming in below market expectations of a slightly rise to 53. The details came in mixed. The production sub-index dropped to 51.3, while backlog of orders dropped to 47.2. Supplier deliveries dropped to 52, whereas inventories index fell to 50.9. Meanwhile, the new orders index was up from 51.7 to 52.7, and employment rose to 53.7.
In the meantime, new export orders rose from 49.5 in April to 51 in May, while imports dropped further to 49.4 from 49.8. The prices paid index rose 3.2 percentage points to 53.2 in May.
Manufacturing activity has decelerated significantly over the past several months as the U.S. “catches down” to its global peers. On the positive side, it continues to be in expansionary territory, which is more than can be said for manufacturing activity in America’s major trading partners, noted TD Economics in a research report.
“The threat of escalating tariffs on Mexico is a big deal, and, if followed through will impose significant costs on consumers and businesses and likely lead to further disruptions in American manufacturing activity”, added TD Economics.
At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -61.0652 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
