More signs of an economic slowdown: a dip in manufacturing, construction spending flattens, and cautions in the Fed’s Beige Book

The economic news continues to roll in, and it points to slower growth. 

The Institute for Supply Management reports a dip in manufacturing activity. 

The Institute for Supply Management, an association of purchasing managers, said Tuesday that its manufacturing index slid to 49.1 last month, from 51.2 in July. Any reading below 50 signals a contraction. That’s the lowest for the index since January 2016.

A global softening in demand, worsened by an increasingly high-risk trade war between the U.S. and China, appears to be hurting American manufacturers. More than half of the public comments from companies surveyed by ISM pointed to economic uncertainty as a drag on their businesses.

Not much of a lift coming from construction spending, either.

U.S. construction spending ticked up just 0.1% in July, aided by government spending on schools, sewers and the water supply.

The Commerce Department said Tuesday that spending on construction projects in July occurred at a seasonally adjusted annual pace of $1.29 trillion. So far this year, construction spending has tumbled 2.1%, dragged down by a sharp pullback in expenditures for homebuilding.

Pulling it all together is the latest from the Fed’s Beige Book. The take on “overall economic activity.” (H/T Calculated Risk)

On balance, reports from Federal Reserve Districts suggested that the economy expanded at a modest pace through the end of August. Although concerns regarding tariffs and trade policy uncertainty continued, the majority of businesses remained optimistic about the near-term outlook. Reports on consumer spending were mixed, although auto sales for most Districts grew at a modest pace. Tourism activity since the previous report remained solid in most reporting Districts. On balance, transportation activity softened, which some reporting Districts attributed to slowing global demand and heightened trade tensions. Home sales remained constrained in the majority of Districts due primarily to low inventory levels, and new home construction activity remained flat. Commercial real estate construction and sales activity were steady, while the pace of leasing increased slightly over the prior period. Overall manufacturing activity was down slightly from the previous report. Among reporting Districts, agricultural conditions remained weak as a result of unfavorable weather conditions, low commodity prices, and trade-related uncertainties. Lending volumes grew modestly across several Districts. Reports on activity in the nonfinancial services sector were positive, with reporting Districts noting similar or improved activity from the last report.

Slow growth. Better than no growth. And much better than a recession. The uncertainty continues.