U.S. Manufacturing Drops for Second Month

Hiring stays at modest rate.

Manufacturing in the United States contracted for a second consecutive month in July, further evidence of an economy growing at a sluggish pace.

At the same time, a private survey showed that businesses kept hiring at a modest pace in July, suggesting a possible improvement in the job market.

The Institute for Supply Management, a trade group of purchasing managers, said Wednesday that its index of manufacturing activity ticked up to 49.8, from 49.7 in June, but a reading below 50 indicates contraction. In June, the survey showed manufacturing contracted for the first time in three years.