US Manufacturing PMI Cools to 54.6% as Tariffs, Iran Conflict Bite
Tempe, Ariz. – – September 07, 2026 -- U.S. manufacturing activity expanded for an eighth straight month in August, but the pace cooled as the ISM Manufacturing PMI fell to 54.6%, down 1 percentage point from July's 55.6%, according to the Institute for Supply Management (ISM). The reading marks the sector's recovery from a 10-month contraction and corresponds to an estimated 2.4% annualized increase in real GDP, ISM said. The broader U.S. economy has now expanded for 22 consecutive months.
New orders and backlogs lose momentum as demand sentiment softens
The New Orders Index dropped 3 points to 53.7% from 56.7% in July, while the Backlog of Orders Index fell 3.2 points to 51.8%. The positive-to-negative comment ratio on demand narrowed to 2-to-1 in August from 3.5-to-1 the prior month. New Export Orders bucked the trend, edging up 0.2 point to 53.2%.