US manufacturing activity slows in August; input prices still elevated

Manufacturing, which accounts for about 9.4% of the economy, remains supported by an artificial intelligence buildout. A further lift is expected from replenishment of business inventories, which have declined for five straight quarters, the longest such stretch since the Great Recession.

The ISM survey's new orders measure slipped to 53.7 last month from 56.7 in July. The stock of unfinished work decreased, though export orders edged up. A measure of factory employment fell to 51.2 after rebounding in July to 52.8, the highest level since August 2022.

This measure has, however, been a poor predictor of manufacturing employment in the government's monthly employment report. A Reuters survey of economists expects factory employment to have remained weak in August, though overall nonfarm payrolls are seen rebounding after a surprise decline in July. The government will publish the report on Friday.