US factory gauge continues to signal solid expansion in July

A factory worker at the New Balance shoe factory operates machinery.
A factory worker at the New Balance shoe factory operates machinery.PHOTO: AFP/GETTY IMAGES

WASHINGTON (BLOOMBERG) - American manufacturers turned in another solid month in July amid steady growth in production, orders and employment, according to figures from the Institute for Supply Management released Tuesday (Aug 1).

Factory index eased to 56.3 (forecast was for 56.4) from 57.8 a month earlier; readings above 50 indicate growth. Employment gauge cooled to 55.2 from 57.2, while ISM's gauge of new orders eased to 60.4 from 63.5.

While the ISM index settled back from a June level that was the second-highest since 2011, it remains above the average over the past year, as are its three main gauges. The figures signal that optimism about the economy is enduring among American businesses even as prospects dissipate for swift changes on tax and infrastructure policy from Washington lawmakers.

Goods producers are sustaining progress that's been building since 2015. Steady US consumer and business demand, along with a recovering global economy, are allowing manufacturing to hit its stride.

A pickup in the ISM's prices-paid index indicates more factories also reported paying higher prices for inputs and raw materials last month, also a reflection of improving world demand.