US manufacturing sector contracts for the sixth consecutive month in August – PMI

The US Manufacturing PM, which accounts for 10.2% of the economy, rose to 48.7 in August from 48.0 previous month, but disappointed expectations for rise to 49.0.

Although the Index advanced last month it remained below 50 threshold, which divides growth from contraction for the sixth consecutive month, sending fresh warning about the situation in the manufacturing sector.

US factories continue to struggle to accelerate recovery, facing the biggest obstacles from negative impact of import tariffs, though increased spending on artificial intelligence, cushioned negative impact and prevented bigger damage to the industry.

Spending on intellectual property products grew at their fastest pace in four years in the second quarter of this year and provided the biggest positive impact, followed by strengthening investment in equipment.

Economists expect investments into artificial intelligence to continue to gain pace in coming months that would greatly help in balancing negative impact from import tariffs which have already started to bite by higher cost that would subsequently hurt consumers and fuel inflation.