US manufacturing expansion slowed in August as a decline in new orders led factory managers to opt for caution, while US construction spending unexpectedly fell in July, according to data released on Tuesday.
The Institute for Supply Management said its index of national factory activity eased to 52.9 last month, its lowest since March and down from 53.8 in July. Economists had expected a more modest dip to 53.0, according to a Reuters poll, although any reading above 50 still points to expansion.
Within the ISM data, the new orders index fell to 55.3 from 57.5, while prices paid declined to 63.0 from 65.0, providing some evidence that softer growth is putting a damper on inflation.
Analysts polled by Reuters were expecting construction spending to remain unchanged in July from the previously reported rate of $1.175 trillion in June, which represented a 0.3 percent fall from May. In the latest report, the June spending rate was revised to $1.173 trillion, a 0.1 percent increase on month. Construction spending fell as gains in commercial building failed to offset declines in home building.
The Commerce Department reported that private residential construction took its 17th straight drop to reach an annual rate of $534 billion, the lowest since February 2004. Private construction declined 0.7 percent to an annual rate of $880 billion, the lowest level since May 2005.
Private non-residential construction rose 0.4 percent to a $346 billion annual rate, a record high. Public construction was also higher, rising 0.7 percent to $289 billion and its highest level on record.