U.S. manufacturing contracted last month for the first time since February, as new orders and output plummeted and factories cut jobs.
The ISM manufacturing index hit 49.4 in August, the trade group said on Thursday. A reading above 50 indicates expansion in the manufacturing sector while a reading below 50 indicates contraction. Economists expected the ISM Manufacturing to hit 52.2 in August, down slightly from 52.6 in July, according to a Thomson Reuters consensus estimate.
Initial jobless claims came in at 263,000, slightly below the consensus.
U.S. productivity fell 0.6 percent in the second quarter.
In oil markets, Brent crude futures for November traded at $45.74 a barrel , down 2.45 percent, while U.S. crude future for October traded 2.73 percent lower at $43.48 a barrel.
Correction: This story has been updated to reflect it is ISM manufacturing that is due at 10 a.m. ET.