The numbers: American manufacturers in December matched their slowest pace of growth in 11 months as they coped with persistent labor and material shortages and braced for a fresh onslaught from the omicron strain of the coronavirus.
A closely followed index of U.S.-based manufacturers dropped to 58.7% in the final month of 2021 compared to 61.1% in November, the Institute for Supply Management said Tuesday.
Any number above 50% signals expansion and readings above 60% are considered exceptional.
Economists polled by The Wall Street Journal had forecast the index to slip to 60%.
The ISM results are drawn from a survey of senior business executives. The index tends to give a good snapshot of the health of the U.S. economy.
Big picture: Manufacturers have plenty of demand for new cars, electronics, furniture and the like, but they are likely to remain under strain until all the shortages ease up.
Omicron doesn’t help matters. The very contagious strain is likely to make it harder for manufacturers to keep production lines going at full tilt due to employees missing work after catching the virus. Yet they have been less affected by the coronavirus than businesses that deal with customers face to face.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
extended gains in Tuesday trades after the report.
