The Institute for Supply Management (ISM) index that measures this activity is; however, somewhat higher than that registered in November, with 47.4% for the last month of the year compared to 46.7% for the previous month.
Activity is considered to contract when the index falls below 50%, which has been the case for more than a year. On the contrary, a higher record means growth of the sector.
Consequently, none of the six major manufacturing sectors recorded an increase over the past month, according to the ISM index.
The US industry has been suffering for more than two years and was exacerbated by the rate increases applied by the Federal Reserve (Fed, Central Bank) between March 2022 and the summer of 2023, in order to stop high inflation.
The December figure was slightly above the expectations of analysts, who expected a reduced increase, with an index of 47.1%, according to the consensus released by the consulting firm Briefing.com.
“The US manufacturing sector continued to contract in December. Companies continue to adequately manage their production while demand continues to slow,” said Timothy Flores, head of the ISM survey, quoted in the note.
Although household consumption tended to stagnate in the last quarter, it remains largely concentrated in services.
In that sense, the Fed kept its interest rates unchanged in its last three monetary policy meetings, but they also remain at a high level, located in a range between 5.25 and 5.50%.
The first meeting of the year of the Fed Monetary Policy Committee (FOMC) will be held on January 31 and February 1, but no change in rates is expected to be decided, according to analysts consulted by FedWatch, from CME group.
Source: With information from AFP
