The U.S. manufacturing economy unexpectedly contracted in December, ending a streak of 10 consecutive months of growth and sinking to its lowest point in almost five years, a private research group said Wednesday. The decline suggests that the overall economy may be weakening faster than some economists predicted.
The figures are closely watched because a slowdown in factory production can translate to job cuts, which in turn reduces consumer spending -- a major component of the economy.
The Institute for Supply Management, a Tempe, Ariz.-based private research group, said its manufacturing index registered 47.7 last month, down 3.1 percentage points from the 50.8 recorded in November. A reading above 50 indicates growth; below that level indicates contraction.