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US manufacturing activity slowed more than expected in April amid sharp drop in orders and construction spending in March, suggesting a moderation in economic growth.
While data on Wednesday showed private employers hired the most workers in nine months, in April, surge in job growth was likely driven by technical factors. The mixed reports came as the Federal Reserve officials were wrapping up a two-day meeting.
The Fed in March suspended a three-year policy tightening campaign. With the economy is appearing to slow and inflation is muted, the US central bank is expected to re-affirm its decision to halt further increase in interest rate this year.
The Fed raised borrowing costs four times in 2018.
The Institute for Supply Management said its index of national factory activity fell to a reading of 52.8 in April from 55.3 in March. A reading above 50 indicates growth in the manufacturing sector, which accounts for about 12 per cent of the US economy.
The ISM’s new orders sub-index dropped 5.7 points to a reading of 51.7 last month. A measure of export orders also fell and factories reported a decline in hiring, with a measure of manufacturing employment falling to 52.4 from 57.5 in March.
That suggests manufacturing payrolls remained weak in April after they dropped in March for the first time since July 2017.
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