U.S. manufacturing activity expanded for an eighth straight month in August, but the ISM Manufacturing PMI slipped to 54.6 percent from 55.6 percent in July, a decrease of 1 percentage point. The slower headline reading came as the Prices Index held at 71.1 percent, leaving evidence of sustained raw-material cost pressure even as factory growth cooled.
Data Snapshot
| Metric | Current | Previous | Change | Period | As of | Source |
|---|---|---|---|---|---|---|
| ISM Manufacturing PMI | 54.6 percent | 55.6 percent | a decrease of 1 percentage point | August 2026 versus July 2026 | September 1, 2026 | Institute for Supply Management |
| New Orders Index | 53.7 percent | 56.7 percent | down 3 percentage points | August 2026 versus July 2026 | September 1, 2026 | Institute for Supply Management |
| Prices Index | 71.1 percent | 71.1 percent | the same reading as July | August 2026 versus July 2026 | September 1, 2026 | Institute for Supply Management |
| Supplier Deliveries Index | 59.3 percent | 58.9 percent | up 0.4 percentage point | August 2026 versus July 2026 | September 1, 2026 | Institute for Supply Management |
| Employment Index | 51.2 percent | 52.8 percent | down 1.6 percentage points | August 2026 versus July 2026 | September 1, 2026 | Institute for Supply Management |
August PMI falls as new orders and employment cool
The August PMI reading marked the sector’s eighth consecutive month of expansion, while ISM said the broader economy continued expanding for the 22nd consecutive month based on the manufacturing reading. New orders also remained in expansion for an eighth consecutive month, although the New Orders Index fell to 53.7 percent in August from 56.7 percent in July, a decline of 3 percentage points. The Employment Index fell to 51.2 percent from 52.8 percent, down 1.6 percentage points.
Prices Index holds at 71.1 percent as deliveries slow
Raw-material prices increased for the 23rd straight month, according to ISM, which cited steel, aluminum, tariffs and petroleum-based products as drivers. The Prices Index itself held at 71.1 percent in August, unchanged from July.
Deliveries moved in the opposite direction: the Supplier Deliveries Index rose 0.4 percentage point, to 59.3 percent from 58.9 percent. ISM says readings above 50 percent indicate slower deliveries.
With both the headline Manufacturing PMI and New Orders Index down from July, the data show continuing pressure in manufacturing supply chains despite the unchanged Prices Index reading.
Factory input prices and PCE measure different things
The ISM Prices Index is a diffusion measure tracking changes in raw-material prices among manufacturing respondents, rather than a 12-month measure of prices paid by consumers. It therefore cannot be directly compared with the Federal Reserve’s personal consumption expenditures, or PCE, inflation gauge.
Still, the survey arrives against an inflation backdrop that remains above the Federal Open Market Committee’s target. The Federal Reserve reported that PCE inflation rose 4.1 percent over the 12 months ending in May 2026, above the FOMC’s 2 percent target.
