WASHINGTON (Reuters) – U.S. manufacturing activity slowed to a 2-1/2-year low in April amid a sharp drop in new orders while construction spending unexpectedly fell in March, suggesting economic growth was moderating after surging in the first quarter.

FILE PHOTO: A worker assembles an industrial valve at Emerson Electric Co.’s factory in Marshalltown, Iowa, U.S., July 26, 2018. REUTERS/Timothy Aeppel/File Photo

One of the reports from the Institute for Supply Management (ISM) on Wednesday showed businesses increasingly anxious that President Donald Trump’s threats to close the U.S.-Mexico boarder would further disrupt the supply chain. Washington’s trade war with China has created bottlenecks at factories.

The Federal Reserve kept U.S. interest rates unchanged on Wednesday, noting solid economic growth in the first quarter, and also holding out