Economic Buzz: US manufacturing operating conditions improve at slower pace as demand weakens
The latest survey showed a weaker gain in production, amid a renewed contraction in new order books ? the first in exactly a year.
International sales continued to fall, in part linked to tariffs, which also continued to push up operating expenses at an elevated pace. That said, although remaining historically elevated, both input and output prices rose at their slowest rates for 11 months.
Positively, firms reported that employment growth was sustained into the end of 2025, with job creation reaching the most pronounced since August. Confidence in the outlook also remained positive despite easing slightly since November.
The headline index from the report, the seasonally adjusted S&P Global US Manufacturing Purchasing Managers? Index (PMI), recorded 51.8 in December. That was down from 52.2 in November and signaled the weakest expansion of the manufacturing economy in the current five-month growth sequence.
Weaker growth emanated from a contraction in new order intakes. A reduction in demand led to weaker output gains in December, the softest in three months.
Work outstanding declined for the fourth month in a row during December, partly due to an expansion in labor capacity. Indeed, manufacturing firms held a positive outlook regarding the year ahead for sales and production.
Higher prices and weak demand discouraged purchasing activity in the latest survey period, as input buying stalled over the month.
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