WASHINGTON (Reuters) — Factory activity contracted in August for the first time in six months as new orders and production tumbled, the Institute for Supply Management said on Thursday, but a low level of layoffs continued to point to a pickup in economic growth in the third quarter. The institute’s index of national factory activity fell 3.2 percentage points to a reading of 49.4 last month. It was the 78th consecutive week that claims remained below the 300,000 threshold, which is associated with a robust labor market — the longest stretch since 1970, when the labor market was much smaller. The four-week moving average of claims, considered a better measure of labor market trends because it irons out week-to-week volatility, fell 1,000 to 263,000 last week. “Despite some seeming trouble in the manufacturing sector, the overall outlook for employment is positive,” said Michael Gapen, chief United States economist at Barclays in New York.

Source: New York Times September 01, 2016 20:50 UTC