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Bricklin Dwyer, an economist at BNP Paribas, said the uncertainty "has left businesses unwilling to invest." A gauge of production in the ISM's survey fell to its lowest level in more than three years. U.S. factories are also reporting less overseas demand. A measure of exports dropped to 47.5, its lowest level since April 2009. A gauge of employment edged down but remained at a healthy level of 56.6. That suggests factories may still be adding jobs. Manufacturers have reported job gains for eight straight months. Overall hiring has slowed sharply this spring. Employers added an average of only 73,000 jobs per month in April and May. That's much lower than the average of 226,000 added in the first three months of this year. The unemployment rate rose in May to 8.2 percent from 8.1 percent, the first increase in a year. Worries about slowing job growth are outweighing the benefits of lower gas prices. A measure of consumer confidence fell in June for the fourth straight month. Slower job growth and falling confidence are weighing on consumers' willingness to spend. Americans cut back on purchases of autos and other long-lasting factory goods in May, the government said Friday. The sharp drop in U.S. factory activity overshadowed more positive news on housing. Construction spending rose 0.9 percent in May from April, the Commerce Department said in a separate report Monday. It was the second straight monthly increase, even though the level of spending still isn't healthy. The increase was driven by a surge in residential construction. Home sales are up from the same month last year. Mortgage rates are at the lowest levels in history. And prices have begun to stabilize in most markets. The economy could also get a boost this summer from lower gas prices, which have tumbled more than 60 cents per gallon since peaking in April. The result is that consumers have more money to spend on other goods, from autos and furniture to electronics and vacations, that fuel economic growth.
[Associated
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