Activity in the U.S. manufacturing sector continued to expand in the month of May, according to a report released by the Institute for Supply Management on Friday, although the pace of growth slowed by more than economists had anticipated.
The ISM said its purchasing managers index fell to 53.5 in May from 54.8 in April, although a reading above 50 indicates continued growth in the manufacturing sector. Economists had been expecting the index to edge down to a reading of 54.0.
The slower pace of growth in the sector was partly due to a notable slowdown in the pace of production growth, with the production index sliding to 55.6 in May from 61.0 in April.
The inventories index also fell to 46.0 in May from 48.5 in April, indicating an acceleration in the pace of contraction in inventories.
On the other hand, the new orders climbed to 60.1 in May from 58.2 in April, suggesting that the pace of new orders growth accelerated despite the overall slowdown by the sector.
Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012."
The employment index edged down to 56.9 in May from 57.3 in April, although it continued to indicate an increase in manufacturing jobs.
The Labor Department report released earlier in the day said the manufacturing industry added 12,000 jobs in May compared to the addition of 9,000 jobs in April.
With regard to inflation, the prices index tumbled to 47.5 in May from 61.0 in April, pointing to a contraction in prices compared to the growth seen in the previous month.
Next Tuesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of May.
The ISM's index of service sector activity dropped to 53.5 in April from 56.0 in March. The drop surprised economists, who had expected the index to come in unchanged.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.