US manufacturing activity slowed sharply to a two-year low in December amid a plunge in new orders and hiring at factories, suggesting the economy was probably not immune to slowing growth in China and Europe.
The Institute for Supply Management (ISM) survey published on Thursday offered a downbeat assessment of the manufacturing sector, with almost all components declining last month. Concerns about the economy’s health are escalating despite the labor market remaining strong.
“The economy is just going to be spinning its wheels with subpar growth in 2019 if the purchasing managers report is to be believed,” said Chris Rupkey, chief economist at MUFG in New York. “New orders have dried up and this will take a toll on business investment and growth in 2019.”
The Institute for Supply Management (ISM) said its index of national factory activity tumbled 5.2 points to 54.1 last month, the lowest reading since November 2016.