The numbers: U.S. manufacturers are still struggling mightily to cope with broad shortages of supplies and labor that are causing delays in production and holding back an economic recovery, a new survey showed.
A closely followed index of U.S.-based manufacturing dipped to a six-month low of 59.5% in July from 60.6% in the prior month, according to the Institute for Supply Management. That was slightly below the Wall Street forecast.
The survey had topped 60% for five months in a row in a reflection of the rebounding U.S. economy, but businesses could grow even faster if not for persistent difficulties in getting materials on time or finding people to hire.
These problems have forced companies to raise wages and prices and in some cases delay production and leaving customers in the lurch.
Any number above 50% signifies growth.
Big picture: Manufacturers have plenty of business due to a resurgent economy, but they can’t meet the explosion in pentup demand owing to persistent shortages.
These shortages are expected to clear up over time, but it may take awhile. The result is likely to be higher prices — inflation — and a somewhat slower economic recovery.
Market reaction: The Dow Jones Industrial Average
DJIA,
+0.54%
and S&P 500
SPX,
+0.52%
rose in Monday trades.
