U.S. factory activity growth slowed in May to its lowest level since September 2009, suggesting a loss of momentum in the economy in the second quarter, according to a report.
The Institute for Supply Management, a trade group of purchasing executives, said Wednesday that its index of manufacturing activity slid to 53.5 in May after a reading of 60.4 in April. A reading above 50 signals growth.
"It's a bit worrisome on the back of the consumer numbers yesterday and the ADP report this morning. One has to wonder whether the U.S. recovery is starting to stumble,” said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington, D.C.
Another report released Wednesday showed U.S. construction spending rose in April to record the largest gain in six months, likely boosted by home renovations, but the prior month's outlays were revised down sharply.
Construction spending increased 0.4 percent to an annual rate of $764.98 billion, the Commerce Department said. March's construction spending was revised to show a modest 0.1 percent increase rather than the previously reported 1.4 percent advance.
Economists polled by Reuters had forecast construction spending rising 0.3 percent in April.
Overall construction spending dropped 9.3 percent from a year ago.
Private construction spending rose 1.7 percent as investment in residential projects climbed 3.1 percent to $232.13 billion, most likely because of an increase in renovations as housing starts fell sharply in April.