US Manufacturing Jumps to 55.6 as 71.1 Prices Index Pressures Fed for September Hike
Updated
Updated · CNBC · Aug 3
US Manufacturing Jumps to 55.6 as 71.1 Prices Index Pressures Fed for September Hike
3 articles · Updated · CNBC · Aug 3
Summary
July's ISM manufacturing index rose to 55.6, the fastest growth in more than four years and above the 54.0 forecast, with production, export orders and backlogs all strengthening.
Employment returned to expansion for the first time in 33 months, while the prices gauge stayed elevated at 71.1 — the 22nd straight month a large majority of firms reported rising costs.
Factory executives said tariff swings, the Iran war and lengthening lead times have created pricing volatility they described as harder to manage than the Covid-era disruption.
That mix of stronger activity and stubborn inflation is reinforcing expectations the Fed could raise rates in September, even after holding its policy rate at 3.5%-3.75% last week.
Markets were not fully convinced: CME FedWatch showed 64.5% odds of a Sept. 15-16 hike, while Goldman Sachs lifted its third-quarter growth tracking estimate to 2.4%.