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Manufacturing gauge sinks to June 2009 level

WASHINGTON A measure of U.S. manufacturing fell in May to its lowest level since June 2009 as slumping overseas economies and a pullback in business spending reduced new orders and production.

The Institute for Supply Management says its index of manufacturing activity fell to 49 last month, down from 50.7 in April. That's the lowest level in nearly four years and the first time it has fallen below 50 since November. A reading under 50 indicates contraction.

A gauge of new orders fell to 48.8, its lowest level in nearly a year. Production and employment also declined.

Manufacturing has struggled this year as weak economies abroad have slowed U.S. exports. U.S. businesses have also reduced their pace of investment in areas such as equipment and computer software.

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