Factory growth in U.S. slows in July

U.S. manufacturing grew at a slower rate in July as a drop in new orders spawned caution among factory managers, and U.S. private employers probably added jobs last month at their slowest rate in four years, according to separate reports Wednesday.

In the key housing sector, demand for mortgage applications slid last week to the weakest level in more than five months, an industry group said, suggesting that the beleaguered U.S. housing sector has yet to hit bottom.

But in a bright sign for housing, pending sales of previously owned U.S. homes rose at their fastest pace in more than three years in June, a real estate trade group said.

“Manufacturing is showing some signs of at least a temporarily slowing economy here,” said Andrew Richman, a managing director at SunTrust’s personal asset management division in West Palm Beach, Fla.

The Institute for Supply Management said its index of national factory activity fell last month to 53.8, its lowest since March and down from 56.0 in June.

Analysts had been looking for a more modest decline to 55.5, although any reading above 50 still points to expansion.

Global factory growth also eased in July, while production growth slipped to a six-month low.

The Global Manufacturing PMI, produced by JPMorgan with research and supply management organizations, slipped to a four-month low of 53.1 in July from 54.4 in June.

Employment growth also cooled, with that index hitting 51.7 in July from 52.6 the previous month.

Consumer spending eased in the second quarter in the U.S. because of the housing sector’s slump and rising gasoline costs.