WASHINGTON (dpa-AFX) - A report released by the Institute for Supply Management showed U.S. manufacturing activity contracted at a slightly slower rate in the month of December.
The ISM said its manufacturing PMI rose to 47.4 in December from 46.7 in November, but a reading below 50 still indicates contraction. Economists had expected the index to inch up to 47.1.
The uptick by the headline index partly reflected a turnaround by production, with the production index climbing to 50.3 in December from 48.5 in November.
The report also showed employment in the manufacturing sector contracted at a slower rate, as the employment index climbed to 48.1 in December from 45.8 in November.
Meanwhile, the new orders index fell to 47.1 in December from 48.3 in November, suggesting an accelerated contraction in new orders.
'Demand remains soft, and production execution is stable compared to November, as panelists' companies continue to manage outputs, material inputs and labor costs,' said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
On the inflation front, the ISM said the prices index slid to 45.2 in December from 49.9 in November, indicating raw materials prices decreased for the eighth consecutive month.
The ISM is scheduled to release a separate report on U.S. service sector activity in the month of December on Friday.
The services PMI is currently expected to edge down to 52.6 in December from 52.7 in November, although a reading above 50 would still indicate growth.
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