The rate of growth in the economy's manufacturing sector slowed in July, according to a report released on Wednesday.
The Institute of Supply Management said its manufacturing purchasing managers' index fell to 58.1 in July, from 60.2 the previous month.
Economists had forecast a reading of 59.4.
A reading above 50 for the index indicates expansion in the sector, and a reading below 50 signals contraction.
The new orders index fell to 60.2 in July from 63.5 a month earlier.
The employment index unexpectedly increased to 56.5 last month from the prior 56.0. Economists had predicted no change.
The prices paid index decreased to 73.2 in July, from the previous reading of 76.8. Analysts had forecast the reading to drop to 75.5, indicating higher raw materials prices for the 29th consecutive month.
Timothy Fiore, chairman of the ISM business survey committee, highlighted that demand remained strong with new orders above 60 for the 15th straight month, while the customers’ inventories index remained low.
Fiore noted that price pressure remained strong, although the index softened for a second consecutive month.
“Demand remains robust, but the nation’s employment resources and supply chains continue to struggle,” Fiore said.
“Respondents are again overwhelmingly concerned about how tariff-related activity, including reciprocal tariffs, will continue to affect their business,” he added.