US manufacturing weakest in a decade
Readings above 50 represent expansion in the manufacturing sector
FOX Business' Susan Li breaks down ISM manufacturing numbers and the industry's impact on the economy.
The U.S. manufacturing sector contracted to its lowest level since the financial crisis, spurring concerns about the health of the overall economy.
The ISM Manufacturing Index fell for the fifth month in a row to 47.2 in December, down from November's reading of 48.1. That's the weakest reading since June 2009, when it hit 46.3, and well below the 49 reading that economists surveyed by Reuters expected.
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Readings above 50 represent expansion in the manufacturing sector, while readings below 50 represent contraction.
"Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China," Timothy R. Fiore, chair of Institute for Supply Management, said in a statement.
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The U.S. and China have made significant strides toward potentially ending the bitter trade war, which has culminated in hundreds of billions of dollars in tariffs.
In December, the world’s two largest economies announced a preliminary deal, which President Trump said will be signed on Jan. 15 at the White House. Any progress in the trade war, however, will likely boost near-term growth and send markets higher, the report found.
Americans for Free Trade, a coalition of businesses, trade organizations and workers opposed to the trade war, blamed the tariffs for the lackluster reading and urged President Trump to strike a final deal with Beijing.
“Rather than helping, like some continue to claim, tariffs are significantly damaging American manufacturers," the organization said in a statement. "That's because American businesses like manufacturers are the ones paying the tariffs - not China. And they are the ones suffering from the uncertainty and volatility the trade war creates."