U.S. manufacturing activity contracts further in December - ISM

A report from the Institute for Supply Management (ISM) showed on Friday the U.S. manufacturing sector's activity contracted further in December.

The ISM's index of manufacturing activity came in at 47.2 percent last month, down 0.9 percentage point from the November reading of 48.1 percent. That was the lowest reading since June 2009 and missed economists' forecast for a 49.0 percent reading.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

According to the report, the New Orders Index stood at 46.8 percent, a fall of 0.4 percentage point from the November reading, while the Production Index registered 43.2 percent, down 5.9 percentage points compared to the November reading, and the Employment Index recorded 45.1 percent, a 1.5-percentage point drop from the November reading. At the same time, the Backlog of Orders Index posted 43.3 percent, up 0.3 percentage point compared to the November reading, the Supplier Deliveries Index registered 54.6 percent, a 2.6-percentage point increase from the November reading and the Inventories Index recorded 46.5 percent, an advance of 1 percentage point from the November reading. The Prices Index showed a 5-percentage point climb to 51.7 percent in December.

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, "The past relationship between the PMI and the overall economy indicates that the PMI for December (47.2 percent) corresponds to a 1.3-percent increase in real gross domestic product (GDP) on an annualized basis."