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Business activity slows
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June 1, 1998: 11:00 a.m. ET
Purchasing agents' index falls to 51.2 in May as firms catch Asian cold
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NEW YORK (CNNfn) - Weakness in Asian purchasing demand triggered a drop in new orders for American goods in May that created a drag on U.S. business activity, according to newly released economic data.
The National Association of Purchasing Managers' monthly survey of American business activity showed that Asia's economic ills were crimping purchasers' orders as the pace of manufacturing slowed. The NAPM's index, which is based on interviews with purchasing managers at U.S. firms, declined to 52.1 from 52.9 in April.
Economists had forecast a drop to 52.3.
A reading above 50 indicates expansion in the manufacturing sector while a reading below 50 indicates contraction.
"There's definite signs that manufacturing is slowing in response to goods coming in from Asia," said Harvinder Kalirai, an economist with I.D.E.A. "There's a continued contraction in exports. Definitely, Asia's having an impact on U.S. manufacturing."
The U.S. Treasury's 30-year long bond, which earlier saw a 13/32 point price surge as overseas buyers fled to quality, remained at that level, yielding 5.77 percent.
Declines were seen across the index spectrum, with the notable exception of the employment index, which rose to 51.0 from 49.8 in April. Within the figures, the inventories index fell to 43.7 from 46.6 in April, while supplier deliveries slumped to 51.2 from 52.3 the month before.
Export orders suffered one of the largest drops, easing from 49.7 to 47.5 in May. The price index, among the most anticipated figures in the index, also proved sluggish, dipping month-to-month from 41.2 to 41.1.
The Import orders index fell in May to 53.9 from 56.3 a month earlier.
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