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US Manufacturing PMI Shows Signs of Recovery Amid Caution

1/4/2025

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Summary

US Manufacturing Recovery

The US Manufacturing PMI increased to 49.3 in December, showing slower contraction compared to November's 48.4.
New orders and production indices improved to 52.5 and 50.3, suggesting potential growth ahead.
The employment index dropped to 45.3, indicating job losses in the manufacturing sector.
Manufacturers express caution due to rising input costs and ongoing tariff uncertainties.

Summary

Dollar Strengthens Further

The US Dollar gained strength, hitting its highest level since November 2022 as trading resumed after the holidays.
Initial Jobless Claims decreased to 211,000, bolstering the USD in a risk-averse market.
China's PBOC is considering an interest rate cut in 2025 to stimulate economic recovery.
President Biden is likely to block the sale of U.S. Steel to Nippon Steel over national security issues.

History

Historical Context

The recent rise in the US Manufacturing PMI echoes historical trends seen during economic recoveries. Similar to the post-2008 financial crisis, where gradual increases in manufacturing indicators signaled recovery, current improvements in new orders suggest potential growth. However, rising costs and tariff uncertainties mirror past challenges that hindered momentum.

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US Manufacturing Recovery

The US Manufacturing PMI increased to 49.3 in December, showing slower contraction compared to November's 48.4.
New orders and production indices improved to 52.5 and 50.3, suggesting potential growth ahead.
The employment index dropped to 45.3, indicating job losses in the manufacturing sector.
Manufacturers express caution due to rising input costs and ongoing tariff uncertainties.

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