America's manufacturing downturn isn't letting up. Factory activity contracted for the fifth consecutive month in December, registering a worse drop than expected.
The Institute of Supply Management's manufacturing purchasing managers' index logged its lowest level since June 2009 at 47.2, compared with the consensus forecast of 49. It stood at 48.1 in November. Any number below 50 denotes a contraction.Uncertainties surrounding the US-China trade war weighed on the sector last year. And while Washington and Beijing stand to sign a preliminary trade deal on January 15, economic data from December was still deflated because of the spat.
Last week, the Federal Reserve argued in a paper that import tariffs hurt US manufacturing."A positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs," it said.Read MoreEven though the US economy is driven primarily by consumer spending, the on-going manufacturing slump is affecting GDP forecasts for the final quarter of 2019. The New York Fed lowered its fourth quarter growth expectations to 1.1% from 1.
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