U.S. Manufacturing PMI Shows Signs of Recovery Amid Challenges

U.S. manufacturing activity grew in January for the first time in a year, with the PMI rising to 52.6. Despite this rebound, challenges persist due to tariffs affecting raw material costs and supply chains. The tech sector shows resilience, but factory employment continues to decline.

U.S. factory activity registered growth for the first time in a year this January, as new orders showed a significant resurgence. This uptick, however, comes amid ongoing challenges like heightened raw material costs and strained supply chains due to persistent import tariffs.

The Institute for Supply Management reported that manufacturing PMI rose to 52.6, marking its first time above 50 since August 2022. Despite this progress, manufacturing has yet to undergo the transformation forecasted by former President Donald Trump's tariffs, with factory employment decreasing by 68,000 jobs as of 2025.

While the tech industry benefits from an AI investment surge, broader manufacturing sectors struggle, reflected in a 0.7% contraction in factory production during last year's fourth quarter. The Federal Reserve maintains its stance on interest rates, amid expectations that tariff-driven inflation may peak mid-year.

(With inputs from agencies.)