US Manufacturing in July Declined Slowly as Businesses Deal with Excessive Inventory

An assembly worker of Ford Motor works on an F-series pickup truck at the Dearborn Truck Plant in Dearborn, Mich., on Jan. 26, 2022. Rebecca Cook/Reuters

U.S. manufacturing activity in July slowed for the second month, albeit less than had been expected, amid news that supply constraints were easing, according to a report by the Institute for Supply Management (ISM) released on Aug. 1.

The post-pandemic glut in inventories and a growing trade deficit caused by global supply chains are key culprits, though overall economic momentum has slowed down after the economy contracted 1.3 percent in the first half of the year.