US manufacturing shrinks for first time in 3 years

BY NEIL SHAH AND BEN CASSELMAN



The global economic slowdown has finally caught up with American manufacturers.
The U.S. factory sector shrank in June for the first time since July 2009—the first month of the economic recovery—the Institute for Supply Management said Monday. Exports fell, and new orders, which gauge future factory activity, dropped at their fastest pace since the post-9/11 plunge in October 2001.

The report is the strongest evidence yet that Europe's troubles and slowing growth in China are hurting American factories, one of the biggest drivers of the U.S. recovery. Separate reports have shown U.S. exports fell in April for the first time.