U.S. manufacturing sector expands in August at a slower rate than previous month

WASHINGTON — The U.S. manufacturing sector expanded in August at a slower pace than the previous month, a trade group said Tuesday.

The Tempe, Ariz.-based Institute for Supply Management, an organization of corporate purchasing executives, said its index of business activity in the manufacturing sector registered 52.9 in August, down from 53.8 in July. August was the seventh straight month of expansion for the sector, but it was the slowest pace since March.

Wall Street economists were expecting a reading of 53, according to Thomson Financial/IFR.

Readings above 50 indicate expansion and below 50 indicate contraction.

The production and employment indices increased, while new orders declined but remained above 50.

"Both the new orders and production index are encouraging for continuing growth as we head toward the fourth quarter of 2007," Norbert Ore, the chair of the ISM's survey committee, said.

The new orders index came in at 55.3, below July's reading of 57.5, while the production index registered 56.1, an increase from 55.6 in July.

The employment index rose to 51.3, up from 50.2 in July.

The prices paid index fell to 63, down from 65.