U.S. Manufacturing Activity Gains in December

Growth in U.S. factory activity accelerated in December, a sign of stronger momentum in a key sector of the economy headed into the new year.

The Institute for Supply Management on Tuesday said its purchasing managers index rose to 54.7 in December from 53.2 in November. A reading over 50 indicates expansion in the manufacturing sector, while a reading below 50 suggests contraction.

Economists surveyed by The Wall Street Journal had expected a December reading of 53.6.

Factory activity has been weak and choppy for more than a year. The ISM gauge had signaled contraction in late 2015 and early 2016 as manufacturers were squeezed by the energy sector's slump and a strong dollar, which damped foreign demand for U.S. exports.

But the manufacturing sector began to find its footing last year, aided by stabilization in global oil prices. The ISM index has signaled expansion in nine of the past 10 months.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com