Factories hire fewer workers in part of US mid-Atlantic region in December

Manufacturing activity in the mid-Atlantic region of the US was slightly less weak in December, but hiring fell off notably, according to one widely-followed gauge for the sector.

The Federal Reserve Bank of New York´s index of general business conditions strenthened from a reading of -10.74 in the previous month to -4.59, yet it remained in negative territory for a fifth consecutive month.

Economists had penciled in a print of -5.8.

A barometre for new orders included in the same report improved from a reading of -11.82 to -5.07, but remained in negative territory.

Factories in the region took on notably less people, with a sub-index that tracks staffing levels dropping from -7.27 to -16.16.

Another sub-index linked to the average length of employees´ work-week also fell sharply, from -14.55 to -27.27 - its lowest since early 2009.

"Labour market conditions deteriorated noticeably," the New York Fed said in a statement.

On a more positive note, sub-indices for companies´ expectations of future hiring and capital expenditures picked up.

"On balance, we read this morning’s report as consistent with our view that the manufacturing sector will continue to struggle from a strong dollar, weak foreign demand and lower commodity prices," said Barclays´s Jesse Hurwitz in a research note sent to clients.

The forces depressing manufacturing - the strong dollar, excess supply of goods from Asia, and the drop in oil prices, which has hammered energy sector capex - are boosting consumers' spending power.

"At the headline level, the index is consistent wit the ISM manufacturing index nudging back up to 50 or so, but the two numbers do not move closely in line month-to-month," said Ian Sheperdson at Pantheon Macroeconomics.