US Manufacturing Sector Continues Downturn in December 2025

Extended Contraction Period

The US manufacturing sector experienced a deeper contraction than expected in December 2025, extending its downturn to 10 consecutive months. This prolonged decline was primarily driven by significant decreases in new orders and continued pressure from high input costs. The persistent strength of the US dollar and the lingering effects of import tariffs imposed during the previous administration under Donald Trump further exacerbated the situation.

Economic Implications

The prolonged contraction in the manufacturing sector raises concerns about the overall health of the US economy. Manufacturers faced challenges from both domestic and international fronts, including weakening global demand and supply chain disruptions. The situation underscores the complex interplay between global trade policies and domestic economic conditions.

Market Reactions

The news is likely to have implications for US monetary policy and market sentiment. Investors and analysts will be closely monitoring subsequent economic data releases for signs of stabilization or further deterioration in the manufacturing sector.