factory manufacturingU.S. factory activity slowed in July, according to the Institute for Supply Management, but the decline was less than economists had expected. The manufacturing index dipped to 55.5, from a revised 56.2 in June. A Bloomberg survey had expected the manufacturing index to dip to 54.0. The index was at 59.7 in May and 60.4 in April.

Two key components of the index -- employment and prices paid -- rose in July. The month also marked the 12th consecutive month manufacturing activity has expanded. Readings above 50 indicate an expansion; under 50, a contraction.

Factories Still Hiring

In July, the employment component rose to 58.6 in July from 57.8 in June -- an increase that indicates that the roughly half-year trend of job growth in the nation's manufacturing sector continued this summer.

Also, the prices component inched slightly higher to 57.5 in July from 57.0 in June. Although the prices gain was small, the fact that it rose suggests price softness is limited -- an encouraging development, given economists' growing concern about deflation.

In addition, the closely watched new orders component slumped to 53.5 in July from 58.5, but the component fell less than expected and remains above the key 50 expansion/contraction demarcation line. This suggests a continued increase in demand in the pipeline.

A Slightly Slower Factory Expansion

Norbert J. Ore, chairman of the ISM's Manufacturing Business Survey Committee, said the expansion continued in the nation's factory sector this summer, albeit at a slightly slower pace.

"Manufacturing continued to grow during July, but at a slightly slower rate than in June. Employment, supplier deliveries and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production," Ore said in a statement. He added, "July marks 12 consecutive months of growth in manufacturing, and indications are that demand is still quite strong in 10 of 18 industries. The prices that manufacturers paid for their inputs were slightly higher but stable, with only a few items on the short supply list."

Respondents to the ISM's July survey confirmed an ongoing manufacturing expansion, but one that also shows that conditions have cooled slightly.

"Business in July was strong, the best month since October" (fabricated metal products sector). "Slow economy has killed sales for new equipment orders (machinery sector). "Business continues to be sluggish and has fallen slightly as the economic ills continue" (non-metallic mineral products sector).

After July's less-than-expected dip in the manufacturing index, the most compelling stats in the July report are the readings for employment and prices paid. The employment component points to continued hiring by the nation's factories -- which is good news for a U.S. economy that needs all of the new jobs it can get. Further, the rise in the prices component indicates, at least as of this summer, that pricing power remains adequate in the factory sector -- a welcome sight for a nation trying to avoid deflation.

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LaharlD2

The Democrats take Republican's orders. I think it's time to be disgusted by both. Neither are mostly for the poor or low class...so where is the balance? More catering the rich.

August 02 2010 at 11:48 PM Report abuse rate up rate down Reply
tomgold125

Fox news gives both sides of a view point. Some people don't care
about seeing both view points. It's like the NAACP, this organization
was co-founded by liberal whites and to this day will not allow conservative
blacks to join.

August 02 2010 at 11:23 PM Report abuse +5 rate up rate down Reply
telebob52

hello RA..hows things

August 02 2010 at 9:04 PM Report abuse +1 rate up rate down Reply
Jen

Les than expected but it did. Another oxymoron by the king of liberal finace reporting. We are being compared to a baseline that according to the annoiunted one was second to the great depression. So showing single digit growth is not a herculean feat...unless of course you have negatively influenced the private sector, like this administration has.

August 02 2010 at 8:51 PM Report abuse +1 rate up rate down Reply
braun1994

Will wait to purchace items ..when obama is out of office.

August 02 2010 at 7:59 PM Report abuse +1 rate up rate down Reply
Rick Nelson

Just another example of the progressive liberal press trying to prop up the Obama economic numbers to make people believe that everythig is great.
Bull feathers, the Obama administration plan of tax an takeover will destroy this country.
If you believe in Obama you might as well just burn the founding documents of this country and declare Obama king for life.
if you beleive in that may you burn in the hell you create.
THE UNDERGROUND

August 02 2010 at 7:01 PM Report abuse -2 rate up rate down Reply
jbjg24m

believe that AOL is trying to eliminate all the clones and troublemakers here !

August 02 2010 at 6:58 PM Report abuse +3 rate up rate down Reply
goringm14

Two key components of the index -- employment and prices paid -- rose in July. The month also marked the 12th consecutive month manufacturing activity has expanded. Readings above 50 indicate an expansion; under 50, a contraction. @@@@Ok, so is this bad news?

August 02 2010 at 4:54 PM Report abuse +3 rate up rate down Reply
1 reply to goringm14's comment
jbjg24m

in my opinion, not quite sure about it darlin !

August 02 2010 at 6:53 PM Report abuse +3 rate up rate down Reply
Luette

you mean not as much as Obama hoped for......we know exactly what his agenda is. So, please forgo treating America like idiots.

August 02 2010 at 4:42 PM Report abuse -2 rate up rate down Reply
Relevant Data

The liberals plan to fix this mess by stopping the Republicans from letting in millions of illegal aliens at the mexican border in Arizona. Then they keep them safe in Liberal sanctuary cities. The unions chased our jobs away to foreign nations and now the unions vote for the party to allow millions of new workers into this country. Thousands of SEIU union members were bused to Arizona from California in an effort to get the Republicans to leave the illegal aliens alone and seek work here. So this is the democrats plan to help our jobless economy?

August 02 2010 at 4:37 PM Report abuse +5 rate up rate down Reply
1 reply to Relevant Data's comment
CONWAYS

No. This is the Liberals' Plan to help the Democrat Party, at the expense of the Country.

August 02 2010 at 5:07 PM Report abuse +4 rate up rate down Reply