Economic indicators beginning to turn for U.S. manufacturers

Manufacturing activity in the U.S. slowed in July, but less than expected. Additionally, supply constraints are beginning to ease, as prices paid for inputs by factories fell to a two-year low. Taken together, these factors seem to indicate that inflation has likely peaked.

An Institute for Supply Management survey released Monday showed companies continuing to hire at strong rates with few instances of layoffs, freezes or reduction through attrition.

It was a better-than-expected ISM reading that suggested the economy was not in recession. However, businesses are storing excess inventories after over-ordering from worry about shortages, depressing new orders.

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