U.S. manufacturing activity expands, labor crisis persists

02.09.2021 - Petr Mazaylo
U.S. manufacturing activity expands, labor crisis persists

The United States’ manufacturing activity recorded an unforeseen expansion in August driven by strong order growth. However, a measure of factory employment declined to a nine-month low due to a scarcity on workers.

The Institute for Supply Management (ISM) index on national factory activity jumped to 59.9 from July’s 59.5. This contributed 11.9% to the U.S. gross domestic product and was better than economists’ forecast drop to 58.6.

Manufacturing was showing resilience due to vaccination efforts against the COVID-19. Computer and electronic goods manufacturers said they were able to manage a shortage in global semiconductor that hit the supply chain.

Meanwhile, a measure of factory employment slumped to its lowest level since November in August.

The ADP National Employment Report showed private payrolls jumped by 374,000 jobs after rising 326,000 in July. Economists predicted it to increase by 613,000 jobs.

The pandemic has shifted labor market dynamics, resulting in worker shortages despite a record of 8.7 million individuals without jobs. The labor crisis is projected to alleviate in September.

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