U.S. manufacturing growth slowed in January for a third straight month amid weaker employment, higher costs and fewer new orders, according to a survey published on Wednesday.

The Institute for Supply Management said its index of national factory activity fell to 54.8 in January from an upwardly revised 55.6 in December.

The January reading fell short of economists' median forecast for a reading of 55.4.

The index has remained above 50, a reading denoting expansion in the sector, for about three years running.

The ISM's employment gauge slipped to 51.3 from 53.6, off from its recent peak of 56.0 in November.

The survey's new orders measure, a signal of future growth, decreased to 58.0 from 59.1. It has fallen in three of the last four months.

The survey's prices paid component, considered an inflation measure, rose to 65.0 from 63.0 in December.

A continuing rebound in oil prices could threaten manufacturers' profit margins in coming months. While still below record peaks set in early September after Hurricane Katrina, prices rose about $7 a barrel, or 11 percent, in January.

On Tuesday, two regional reports suggested that the U.S. manufacturing sector is still expanding but could be losing steam in some areas.

The National Association of Purchasing Management-New York's index of local business activity rose to 356.7 in January from 354.2 in December. However, NAPM-Chicago's business barometer slipped to 58.5 from December's 60.8.

Last week, new orders for U.S. durable goods rose a bigger-than-expected 1.3 percent in December.