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U.S. Manufacturing Index Unexpectedly Indicates Faster Growth In December

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Reflecting strong expansions in new orders and production, the Institute for Supply Management released a report on Wednesday showing growth in U.S. manufacturing activity unexpectedly accelerated in the month of December.

The ISM said its purchasing managers index rose to 59.7 in December from 58.2 in November, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to edge down to 58.1.

The unexpected increase by the headline index was partly due to a notable acceleration in the pace of new orders growth, as the new orders index jumped to 69.4 in December from 64.0 in November.

The production index also climbed to 65.8 in December from 63.9 in November, indicating a modest acceleration in the pace of growth.

On the other hand, the employment index dropped to 57.0 in December from 59.7 in November, although the reading above 50 indicates the fifteenth consecutive month of job growth in the manufacturing sector.

"Employment expansion remains strong, but difficulties across the supply chain continue to constrain production output," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

The report also said the prices index increased to 69.0 in December from 65.5 in November, suggesting an acceleration in the pace of price growth.

The ISM is scheduled to release a separate report on activity in the service sector in the month of December on Friday. The non-manufacturing index is expected to inch up to 57.6 in December from 57.4 in November.

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