U.S. factory gauge tumbles by most since 2008

NEW YORK — A gauge of U.S. manufacturing plunged last month by the most since October 2008, a fresh sign of deceleration in the economy amid global strains across the sector. U.S. stocks extended declines and Treasury yields fell after the report.

The Institute for Supply Management index dropped to a two-year low of 54.1, missing all estimates in Bloomberg’s survey, data showed Thursday.

All five main components declined, led by new orders slumping the most in almost five years and the steepest slide for production since early 2012.

Employment, delivery and inventory gauges fell, and ISM said just 11 of 18 industries reported reported growth in December, the fewest in two years.

The index compiled from a survey of manufacturers has tumbled sharply from a 14-year high in August, though it remains above the 50 dividing line between expansion and contraction.

The 5.2-point drop from the prior month has been exceeded just twice this century, both times during recessions: in the financial crisis a decade ago and following the Sept. 11, 2001, terror attack.

Such weakness adds to warning signs that President Donald Trump’s trade war and a fading lift from fiscal stimulus are weighing on American producers.