The Chicago Business Barometer, also known as the Chicago PMI, fell 8.9 index points to 46.9 in December.
Economists polled by the Wall Street Journal had forecast a 50 reading.
The index had jumped to 55.8 in November, the highest level in 17 months, after the end of the United Auto Workers strike.
Readings below the 50 level indicate contraction. Before the surge in November, the index had been in contraction territory since August 2022.
The Chicago PMI is produced by the ISM-Chicago with MNI. It is released to subscribers three minutes before its release to the public at 9:45 am Eastern time.
It is the last of the regional manufacturing indices before the closely watched national ISM manufacturing data for December is released next Wednesday.
So far, the regional Federal Reserve manufacturing surveys for December suggest modest weakening in the outlook for manufacturing, economists said.
Stocks
DJIA
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were little changed on Friday. The yield on the 10-year Treasury note
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rose slightly to 3.88%.
