By Scott Kanowsky
Investing.com -- U.S. manufacturing activity slowed for the second straight month in July as firms remain wary of a weakening economic outlook and supply challenges despite signs of a cooldown in red-hot inflation, the Institute for Supply Management said on Monday.
The ISM Purchasing Managers Index fell to a fresh two-year low of 52.8, down from 53 in June. It remained safely above the 50-point level, indicating growth in the sector, and was above analyst estimates of 52.
The reading has been in expansion territory for more than two years now.
"Panelists are now expressing concern about a softening in the economy, as new order rates contracted for the second month amid developing anxiety about excess inventory in the supply chain," said ISM's Tim Fiore in a statement.
Monthly new orders decreased by 1.2 percentage points to 48, according to ISM. Businesses surveyed said they are seeing clients shy away from potential purchases as they worry about a downturn in the broader U.S. economy.
However, Fiore noted that price rises have eased "dramatically" in July, citing energy market volatility, decreased chemical demand, as well as a decline in the markets for metals like copper and steel. ISM's Prices Paid subindex - an indicator of inflationary pressure in the U.S. economy - dropped by 18.5 points to 60, marking the largest one-month drop since 2010.
The dollar index - which measures the currency against a basket of other rivals - was trading lower by 0.52% after the data was released.