WASHINGTON (AP) — U.S. manufacturing grew slightly last month and factory hiring increased. The modest gain suggests the economy entered the new year with some momentum.

The Institute for Supply Management said Wednesday that its index of manufacturing activity rose in December to 50.7. That's up from a reading of 49.5 in November, which was the lowest reading since July 2009, one month after the recession ended.

A reading above 50 indicates growth, while a reading below signals contraction. The ISM is a trade group of purchasing managers.

A measure of employment increased last month to 52.7. That's up from 48.4 in November, which was the first time the employment gauge fell below 50 in three years.

Factories have cut jobs in three of the four months through November, according to government data. The jump in employment in the ISM survey suggests manufacturers may have stepped up hiring last month.

The Labor Department releases the December jobs report on Friday.

Still, a gauge of new orders was unchanged and production grew more slowly, the survey found. Manufacturers also cut back on stockpiles, a sign of concern about future demand.

"The trend in manufacturing remains weak," Jim O'Sullivan, an economist at High Frequency Economics, said in a note to clients.

The closely watched manufacturing survey was completed before Congress reached a deal to avoid the "fiscal cliff."

The last-minute deal passed Tuesday averts widespread tax increases and delays deep spending cuts that had threatened to push the country back into recession. Still, most Americans will see some increase in taxes this year, which will likely slow consumer spending.

Stocks surged immediately after the market opened in response to the deal. The Dow Jones industrial average jumped 308 points — the biggest gain in a year — to close up at 13,412. Broader indexes also rose sharply. Continued...