Reuters

(Reuters)

U.S. Manufacturing Falls Deeper into Contraction Territory

Politics Dow Jones Newswires

U.S. factory activity contracted for the second straight month in December, highlighting the global forces weighing on American manufacturers.

The Institute for Supply Management said Monday its gauge of manufacturing activity fell to 48.2 last month from 48.6 in November.

December's figure was the lowest since the tail end of the recession. A reading below 50 indicates the manufacturing sector is contracting.

Economists surveyed by The Wall Street Journal had expected the index to register at 49.0 in December.

The manufacturing sector has slumped over the past 12 months. It has been squeezed by low energy prices, which reduced demand for oil- and gas-field equipment, weakness overseas and currency movements. A strong dollar has curtailed demand for U.S. exports while also making imported goods cheaper.

Manufacturing accounts for roughly 12% of the nation's economic output.

Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com

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