Factory orders are on decline

Manufacturing in the U.S. stagnated in July as orders slumped to the lowest level in almost seven years, signaling that higher raw material costs and slower spending are hurting producers.

The Institute for Supply Management’s factory index fell to 50, a higher reading than forecast, from 50.2 in June, the group said. A reading of 50 is the dividing line between expansion and contraction.

While the index fell to a five-year low of 48.3 in February, it was still well above the 42.1 reading reached in February 2001, a month before the start of the 2001 recession.