U.S. manufacturing growth fell in December, with a S&P Global Manufacturing Purchasing Managers’ Index (PMI) reading of 51.8, down from 52.2 in November. A reading above 50 signals expansion, while a reading below 50 signals contraction.
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“Something of a Wiley E Coyote scenario has developed, whereby – just like the cartoon character continues to run despite chasing the roadrunner off a cliff– factories are continuing to produce goods despite suffering a drop in orders,” said S&P Global Market Intelligence Chief Business Economist Chris Williamson.
Tariffs and Costs Weigh on U.S. Manufacturers
Williamson added that the difference between production growth and the drop in orders is the largest since 2008-2009 when the Great Recession ravaged the economy. He also warned that payrolls could take a hit if production is dialed back.
Furthermore, manufacturers continue to be impacted by tariffs and worry that the impact of passing on higher costs to customers could hurt sales. While input cost inflation eased in December to the lowest level since January 2025, U.S. manufacturers are likely still experiencing higher cost growth relative to most global competitors.
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