US factories activity eased in March amid the US downturn and financial market turmoil, an industry survey showed today.
The closely watched Institute for Supply Management report on US manufacturing in March inched up to 48.6 from February's 48.3 but remained below the 50 level, which separates growth from contraction.
A weak reading on new orders pointed to sluggish demand as the economy teeters on the brink of recession.
The report also showed a rise in inflation.
The prices paid index jumped to 83.5 from 75.5 a month earlier, hitting the highest level since October 2005, when oil prices spiked in the wake of Hurricanes Katrina and Rita.
The Fed is expected to cut interest rates again later this month, but high inflation has sparked some debate about how much lower the central bank can go.