Manufacturing in the U.S. unexpectedly contracted in November at the fastest pace since the last recession as elevated inventories led to cutbacks in orders and production.<br />The Institute for Supply Management's index dropped to 48.6, the lowest level since June 2009, from 50.1 in October, a report from the Tempe, Arizona-based group showed Tuesday.<br />"It's the perfect storm for manufacturing," said Brett Ryan, a U.S. economist at Deutsche Bank Securities Inc. in New York, whose forecast was among the closest in the Bloomberg survey.<br />The slowdown will probably be short-lived as U.S. consumer spending remains healthy, Bradley Holcomb, chairman of the ISM factory survey, said on a conference call with reporters.<br />Efforts to trim the remaining inventory overhang will probably come at the expense of growth in future quarters as companies pare orders to align supply with demand.
