US manufacturing activity accelerated in January after an easing of growth in December. The Institute for Supply Management’s manufacturing purchasing managers index rose to a reading of 56.6 in January, up from December’s two-year low of 54.3. However, all readings above 50 indicate expansion.

The employment portion of the index, however, fell to its lowest reading since April 2018.

“Exports continue to expand, but at the lowest level since the fourth quarter of 2016. Prices contracted for the first time since the first quarter of 2016,” said Timothy Fiore, chair of the Institute for Supply Management’s manufacturing business survey committee. “The manufacturing sector continues to expand, reversing December’s weak expansion, but inputs and prices indicate fundamental changes in supply chain constraints.”

The employment portion of the index decelerated to a reading of 55.5 in January from 56.0 in December. Still employment readings above 50.8 are generally consistent with an increase in US Bureau of Labor Statistics data on manufacturing employment.

“Employment continued to expand, supporting production growth, but at the lowest expansion level since April 2018, when the index registered 55.2 percent,” Fiore said.