The numbers: A closely-watched index that measures U.S. manufacturing activity slipped to 48.4 in December from 49 in the prior month, according to the Institute for Supply Management on Wednesday. This is the lowest level since May 2020.
Any number below 50% reflects a shrinking economy.
Economists surveyed by the Wall Street Journal had forecast the index to inch down to 48.8.
The sector had contracted in November for the first time since May 2020.
Key details: New orders, production and employment all fell in December.
Supplier deliveries fell to the lowest level since 2009.
The prices companies pay for raw materials and other supplies continued to drop, falling to the lowest level since the pandemic.
Big picture: The ISM gauge has been trending lower for months as rising interest rates are weighing on sales and orders. The weakness in the factory sector is spreading to more and more industries.
The lower prices will continue to push down core goods prices. Buyers now have pricing power.
Market reaction: Stocks
DJIA,
SPX,
opened higher on Wednesday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
slipped to 3.7%.
