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US factory gauge dips to nine-month low as inflation heats up
[WASHINGTON] US manufacturing expanded last month at the slowest pace since July, while prices paid for materials continued to accelerate amid supply constraints and tariff concerns, data from the Institute for Supply Management showed Tuesday.
The results included signs that factories are having trouble keeping up with demand. A measure of order backlogs was the highest in almost 14 years, and delivery times lengthened to match the second-longest since March 2010. The gauges for new orders and production weakened for a fourth straight month.
Even with the April decline, the main index is close to the 57.9 average since January 2017 and is consistent with solid-but- moderating activity. Trump administration policies have created both tailwinds and headwinds for manufacturers: Tax cuts are expected to underpin demand, while materials costs are accelerating, partly from supply-chain disruptions stemming from tariffs on imported steel and aluminum. Energy costs are also on the rise, with oil reaching a three-year high last month.
Economists taking note of the softer ISM factory payrolls index may nonetheless wait for its services counterpart before tweaking forecasts for April employment. The group's non- manufacturing survey data are due Thursday, a day before the Labor Department’s jobs report.