A key barometer of U.S. factories was negative for the seventh month in a row and pointed to an ongoing slowdown in manufacturing, but weaker demand is also acting to curb high inflation.

The Institute for Supply Management's manufacturing survey slipped to 46.9% from 47.1% in the prior month.

Numbers below 50% signal contraction in the industrial side of the economy. The index has been below that mark since last November.

The last time the index was below that threshold for more than six months was between March 2008 and June 2009 -- during the Great Recession.

Economists polled by the Wall Street Journal had forecast the index to register 47.0% in May.

Most manufacturers aside from those associated with the auto industry have experienced weaker sales due to consumers shifting more spending to services such as travel and recreation. Exports have also softened in response to slower economic growth around the world.

Source : Marketwatch