U.S. factory activity contracted for a second straight month in March, according to a report on Tuesday that also renewed worries about inflation, even as the economy appeared gripped by recession.
The Institute for Supply Management said its index of national factory activity edged up to 48.6 in March from 48.3 in February, but was still below the level of 50 which separates growth from contraction. It was the third time in four months the gauge has shown contraction.
Meanwhile, the survey's measure of inflation jumped to its highest since the immediate aftermath of Hurricane Katrina in 2005, when energy prices soared.
"The ISM manufacturing index gave a choppy sideways picture of manufacturing which is better than might have been feared but doesn't give conclusive indication whether export strength will sustain overall activity in the face of domestic spending," said Pierre Ellis, senior economist at Decision Economics in New York.
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