- ISM Manufacturing PMI fell at a stronger pace than expected in June.
- US Dollar Index continues to push higher after the data.
The business activity in the US manufacturing sector expanded at a much softer pace in June than it did in May with the ISM Manufacturing PMI dropping to 53 from 56.1. This print came in weaker than the market expectation of 54.9.
Further details of the publication showed that Employment Index declined to 47.3 from 49.6 and New Orders Index fell to 49.2 from 55.1. Finally, Prices Paid Index dropped to 78.5 from 82.2, compared to analysts' estimate of 81.
Commenting on the data, "the US manufacturing sector continues to be powered — though less so in June — by demand while held back by supply chain constraints," noted Timothy R. Fiore, Chair of the ISM 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, according to Business Survey Committee respondents' comments," Fiore added. "Panelists reported lower rates of quits compared to May. Prices expansion slightly eased for a third straight month in June, but instability in global energy markets continues."
Market reaction
Wall Street's main indexes erased daily gains after the disappointing data and the dollar continued to gather strength as a safe haven. As of writing, the US Dollar Index was up 0.85% on the day at 105.62.
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