WASHINGTON (Reuters] – The January outbreak of COVID-19 infected caused a drop in manufacturing activity at U.S. factories to a 14 month low. These numbers support the belief that there was a slowdown in economic growth.

On Tuesday, the Institute for Supply Management (ISM), reported that their index of national manufacturing activity fell to 56.6 in December. It was the lowest reading in November 2020. This came after 58.8 in Dec.

If the index is above 50, it indicates an expansion in manufacturing. This sector accounts for 11.9% US GDP. Reuters polled economists and predicted that the index would fall to 57.5.

December saw a slowdown in the economy, and it continued into 2022, as Omicron-driven coronavirus infection raged throughout the country. Economists expect a significant slowdown in January’s job growth due to the disruptions that have occurred at schools and businesses.

In the fourth quarter of 2018, the economy experienced 6.9% annualized growth, which helped to increase overall growth to 5.7% in 2021, its highest level since 1984. Goldman Sachs (NYSE) economics cut Monday their 1.5% first-quarter growth rate to 0.5%, down from 2.0%. This was attributed to Omicron and a reduction in money given to households by the government.

ISM’s forward-looking sub-index for new orders fell to 57.3 last month. This is the lowest reading since June 2020. It was 61.0 in December. This was the second consecutive month of slowing new orders. However, customer inventories are still low which may help limit order growth’s pace.

Another sign was seen of improvement in supply chain performance.

The survey measured suppliers deliveries at 64.6. An index reading higher than 50% means slower factory deliveries. This is positive given that the Omicron wave was feared by economists to keep factory workers home, causing further supply chain stress.

Despite this, the prices at factory gates continued to rise.

Inflation could be high for quite some time, as indicated by the 76.1 reading in the December survey.

According to economists, seven additional hikes are possible this year in order to curb inflation. The Federal Reserve announced last week that they were likely to increase interest rates by March.

Omicron’s rampage was not a deterrent to factories hiring more workers. The ISM survey measured manufacturing employment at a 10-month peak. This news is good news considering the expected sharp decline in employment growth, or even decrease in nonfarm payrolls for January.

A preliminary Reuters survey by economists found that nonfarm payrolls increased by 153,000 jobs during January, after increasing 199,000 in December. There are a range of estimates, from 250,000 jobs falling to 385,000. Friday’s January Employment Report will be published by the Labor Department.