Reuters reported that manufacturing improved slightly in August 2012 but hiring in the sector slowed and weak overseas demand for American goods kept the pace of overall growth subdued.
Financial information firm Markit said that its US flash manufacturing Purchasing Managers Index edged up to 51.9 in August 2012 from 51.4 in July 2012. The August 2012 reading marked the first monthly increase in five months. But it was the third weakest result since the manufacturing sector stopped shrinking in October 2009.
A reading above 50 indicates expansion.
Mr Rob Dobson senior economist at Markit said that "Although the latest survey data pointed to a slightly better performance than that registered in July 2012, it nonetheless suggested that manufacturing continued to take a hit from weak economic conditions in key export markets."
While increased marketing and lower prices helped overall new orders rise to 52.6 from 51.0, new export orders fell outright for a third consecutive month. Recession in much of Europe and a slower pace of growth in China and other developing countries have helped to cool what had been fairly steady growth in US manufacturing in 2011.
The rate of job creation slowed for a fifth straight month, with the index's employment component slipping to 52.5 in August 2012 from 52.7 in July 2012. The broader US economy grew at a sluggish 1.5% pace between April and June 2012, though more recent economic data has suggested it may have started to pick up some momentum.
That has caused some economists and investors to question whether the Federal Reserve will launch another round of monetary easing next month. Minutes from the Fed's most recent meeting released earlier this week showed that officials thought further easing was warranted fairly soon, but that meeting was held before recent reports showed improvement in hiring and retail sales.
The flash or preliminary reading, is based on replies from about 85% of the US manufacturers surveyed. Markit's final reading will be released on the first business day of the following month.
Source - Reuters
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