WASHINGTON, July 1 (Xinhua) -- The U.S. manufacturing sector saw slower growth in June amid continued supply chain bottlenecks, the Institute for Supply Management (ISM) reported Friday.
The Purchasing Managers' Index (PMI) stood at 53 percent, down 3.1 percentage points from the May reading. Any reading above 50 percent indicates the manufacturing sector is generally expanding.
This is the lowest Manufacturing PMI reading since June 2020, the report showed.
"The ISM manufacturing index slid to its lowest reading in two years amid a contraction in new orders," Tim Quinlan and Shannon Seery, economists at Wells Fargo Securities, wrote in an analysis.
The New Orders Index reading of 49.2 percent is 5.9 percentage points lower than that recorded in May, the ISM report showed.
The Production Index reading of 54.9 percent is a 0.7-percentage point increase compared to May's figure.
"The U.S. manufacturing sector continues to be powered - though less so in June - by demand while held back by supply chain constraints," said Timothy Fiore, chair of the ISM's manufacturing business survey committee.
"Despite the Employment Index contracting in May and June, companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain," Fiore said.
"Panelists continue to note supply chain and pricing issues as their biggest concerns," Fiore noted.
The Employment Index contracted for a second straight month at 47.3 percent, 2.3 percentage points lower than that recorded in May.
The Prices Index registered 78.5 percent, down 3.7 percentage points compared to the May figure.
The Supplier Deliveries Index reading of 57.3 percent is 8.4 percentage points lower than the May figure, indicating faster deliveries and easing supply chain congestion.
"Details of the report demonstrate slower activity in the manufacturing sector, but also that supply problems continue to slowly ease," Quinlan and Seery noted.
"In short, the report piles onto weaker consumer data received this week and signals investment spending is starting to weaken too," they noted.
May personal income and spending report showed that inflation-adjusted consumer spending dropped 0.4 percent, according to the Commerce Department.
Real disposable personal income, which not only adjusts for price changes but also strips out taxes, slid another 0.1 percent in May, indicating that wage growth has been struggling to keep up with price increase.
