U.S. Manufacturing Contracts for 10th Consecutive Month in December 2025
U.S. manufacturing contracted for the 10th straight month in December 2025, with the ISM index dropping to 47.9. The decline highlights structural weaknesses amid ongoing tariff challenges.
Insights:
The U.S. manufacturing sector faced its 10th consecutive month of contraction in December 2025, as the Institute for Supply Management's (ISM) purchasing managers' index (PMI) fell to 47.9. This marks the lowest level since October 2024, underscoring persistent challenges despite broader economic growth. The PMI reading below 50 indicates a contraction in the sector, which accounts for 10.1% of the U.S. economy.
The decline in manufacturing activity is largely attributed to weakening new orders and elevated input costs, both impacted by tariffs imposed during the administration of Donald Trump donald trump. The new orders sub-index was at 47.7 in December, continuing a trend of contraction in 10 of the last 11 months. Factory employment also declined for an 11th consecutive month, reaching its lowest level since March 2022, according to the Bureau of Labor Statistics.
