US Manufacturing Sector's December Performance

According to the second estimate by S&P Global released on Thursday, the United States' manufacturing sector remained in contraction in December. The manufacturing Purchasing Managers' Index (PMI) was reported at 49.4, showing an improvement from the preliminary estimate of 48.3 but still lower than November's figure of 49.7.

Key Factors Impacting the Sector

New orders saw a decline, leading to a significant drop in production. Additionally, delivery times experienced their most substantial increase since October 2022. On a slightly positive note, employment saw a modest rise.

Optimism Tempered by Concerns

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that many firms are hopeful for a business upturn in the New Year. This optimism is based on expectations that the new administration will ease regulations, reduce tax burdens, and increase demand for US-made goods through tariffs. However, December's reports show a tempered optimism as firms express concerns over rising input prices and the potential for inflation to increase once again.