In April manufacturing in the US increased at the slowest pace so far this year and companies hired the lowest number on workers for the past seven months.
The Institute for Supply Management said that its factory index dropped to 50.7 from 51.3 in April 2012, with 50 being the line between growth and contraction. According to the ADP Research Institute private payrolls increased 119,000 in April, the lowest level since September. Factories have begun to pull back as there is no need to rebuild inventories, consumer spending is restrained by higher payroll taxes and the across-the-board federal budget cuts take hold.
“Manufacturing is stalling a bit,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York. “Hiring has probably slowed a little. For the Fed, it’s going to be full speed ahead.”
According to the ISM factory index last month more producers cut inventories compared with March and other figures showed that manufacturing is struggling everywhere in the world. In China factories expanded at a slower pace last month and the Purchasing Managers’ Index dropped to 50.6 in April from 50.9. In the UK manufacturing fell for the third month in April and according to the Markit Economics the gauge increased to 49.8 in April from 48.6.