An industry association revised downward its December reading on expansion in business activity in the U.S. Midwest on Thursday and said employment in the region failed to enter growth territory as it originally reported.

The Institute for Supply Management-Chicago revised its business barometer index reading to 58.7, from the 60.0 it had reported on Wednesday.

In addition, in detailing revisions based on seasonal factors, the group said its employment index for December was 47.6, below the 51.2 it reported on Wednesday.

Any reading above 50 indicates expansion.

Analysts expressed surprise over the revisions, especially coming just one day after the original release.

"Really questions the credibility of numbers," said Andrew Brenner, managing director of Guggenheim Partners in New York. "Too much holiday cheer in Chicago?"

Financial markets showed little reaction to the news, with many firms operating with skeleton trading staffs during the New Year's Eve session.

Stocks were lower on Wall Street, but the losses came before the Chicago report.

Government bonds, which usually benefit from weak surprises in data, remained lower on the day after a separate report showed a surprising drop in weekly claims for jobless benefits.

"It is very strange, especially the employment number. But it is what it is, and the market is paying very little attention to it," said Lou Brien, market strategist at DRW Trading Group in Chicago.

Still, the news on employment will be particularly disappointing since the more optimistic reading reported just a day ago fueled hopes among some that next Friday's payrolls report might show a return to jobs growth.