In June, US industry unexpectedly received fewer orders for the second month in a row. Orders fell by 3.3 percent compared to the previous month, the Department of Commerce announced on Friday. Economists surveyed by the Reuters news agency had expected a decline of only 2.9 percent. In May, orders had already shrunk by 0.5 percent.
The downward trend could continue in July, as an important leading indicator signals: The purchasing managers’ index for industry fell to 46.8 points from 48.5 points in June, according to the company survey by the Institute for Supply Management (ISM). This is the lowest value since November 2023. Growth is only indicated from 50 onwards. Industry accounts for a good ten percent of US economic output.
The interest rate turnaround by the US Federal Reserve, which many experts expect for September, could provide fresh impetus. The Federal Reserve left the key interest rate in the range of 5.0 to 5.25 percent this week, but at the same time opened the door for a reduction. Lower interest rates make loans cheaper, for example for investments. This could help industry to secure new orders.
