US manufacturing activity in January: increased despite tariff challenges

Manufacturing activity in the U.S. shows an unexpected uptick, as the ISM Manufacturing PMI jumped to 52.6 in January, surpassing the critical 50 mark for the first time in 12 months. According to Jin10, this indicator reflects the strongest manufacturing momentum since August 2022, when production also experienced a period of revival. However, within this positive picture lies a complex reality: despite the recovery in activity, the manufacturing sector remains under significant pressure from import tariffs, which have increased material costs and complicated supply chains.

PMI reaches a twelve-month high in activity

After ten consecutive months of decline, manufacturing activity finally turned upward. The PMI at 52.6 signals expansion in the factory sector, but the growth remains modest. The most notable signal is the new orders index, which surged to 57.1, indicating the highest customer activity since February 2022. This jump shows that demand for American-made products has not disappeared entirely but remains selective.

Supply slows down, prices gain inertia

The supplier delivery index rose to 54.4, indicating a slowdown in delivery times—an phenomenon typically associated with economic expansion and strong demand. However, this time, delays are caused by two factors: on one hand, they reflect increased demand; on the other, supply chain issues triggered by tariffs and global trade imbalances. A more concerning signal comes from the price index, which increased from 58.5 to 59.0, demonstrating that producers face rising cost pressures.

Labor market issues and inflation risks

Bad news for optimists is the employment data: the manufacturing sector lost 68,000 jobs in 2025, contrasting with the official narrative of “recovery” during Donald Trump’s presidency. This discrepancy between rising order activity and declining employment underscores manufacturers’ uncertainty about demand sustainability. The rise of the price index to 59.0 suggests that room for further price increases remains, which could pose a long-term inflation threat and suppress purchasing power.

U.S. manufacturing activity presents a mixed picture: positive signals from orders and production dynamics are contrasted by troubling trends in job shortages, price pressures, and structural issues in global supply chains.