Manufacturing sector recovery momentum slows down, US December manufacturing PMI drops to 51.8.

Data released by S&P Global on Friday showed that the final value of the Purchasing Managers' Index (PMI) for the manufacturing sector in the United States in December was 51.8, in line with the preliminary value and market expectations, but slightly lower than 52.2 in November. This reading is still above the 50 threshold, indicating that manufacturing activity continues to expand, but the expansion has slowed to its lowest level in the past five months, suggesting a slowdown in the momentum of manufacturing recovery. Looking at the sub-indices, although manufacturing production in December continued to grow, the pace of growth slowed significantly from the previous month; at the same time, new orders shrank for the first time in a year, reflecting weakening demand. S&P Global pointed out that this change is partly related to tariff factors, as tariffs continue to raise operating costs for businesses and put greater pressure on manufacturing companies. However, the increases in input and output prices have fallen to their lowest levels in 11 months, indicating some easing of cost transmission pressure. Chris Williamson, Chief Business Economist at S&P Global, pointed out that the gap between production growth and order decline has widened to the highest level since the peak of the global financial crisis in 2008, highlighting the potential risks faced by the manufacturing sector. Williamson warned that if demand does not improve soon, current factory production levels are clearly unsustainable, and companies may be forced to cut production capacity, which could have adverse effects on employment, wages, and labor data. This assessment has kept the market cautious about the outlook for manufacturing and labor markets in the coming months. As an important leading indicator of manufacturing activity, the PMI has always been closely watched by traders and investors. Purchasing managers are usually among the first to know about a company's operating conditions, so this indicator is often seen as a barometer of the overall economic trend. Generally speaking, a higher-than-expected PMI is seen as bullish for the US dollar, while a lower-than-expected PMI is seen as bearish. This data was completely in line with expectations, so its overall impact on the US dollar was neutral. Overall, the December PMI remained in the expansion range, indicating that the US manufacturing sector still has some resilience amid multiple economic pressures. However, the signals of slowing growth and weakening new orders also serve as a reminder to the market that the foundation of manufacturing recovery is not stable. In the future, investors will continue to closely monitor the PMI and other key economic indicators to assess whether the US manufacturing sector, and the overall economy, can maintain growth momentum in the face of weakening demand and cost pressures.