The US economy started in 2025 in hope, as the manufacturing business returned to growth for the first time in six months, the new strength of the industrial sector, and the service sector continued to expand.
The latest S & P Global Flash US Manufacturing PMI rose to 50.1 in January, slightly exceeding the expansion and shrinking standard. This is a significant turnaround for the industry, which had been hit due to a decrease in demand and stagnation of production for months.
Chris Williamson, Chief Business Economist in S & P Global Market Intelligence, said, “We expect the manufacturers to have a bright year in the future.” “Because the factory is waiting for the Trump administration's new policy support, the expectation of growth next year is growing rapidly.”
Growth promotion policy accelerates optimism
The resurrection of the manufacturing industry consists of an optimistic view of the economic direction under the President of Trump. It is widely expected that domestic production and investment will be promoted by deregulation, tax reduction, and protection and trade. These policy change activated both manufacturers and service providers, and have reached a level that has not been seen since mid -2022.
The manufacturing industry is particularly enthusiastic, but the service department's trust is still high. With the expansion of optimistic perspectives, companies have expanded their hiring at the fastest pace in the past two and a half years, and have shown a remarkable recovery from the loss of employment for several months. Service providers have led the rapid increase in recruitment, and the number of employees in the manufacturing industry has reached a high level in six months.
However, the economic recovery also involves issues. In January, inflation pressure increased, and both the cost and selling price rose at a fast pace in four months. Manufacturers have returned the rising costs to the raw material price led by suppliers, but the service provider has reported that wage pressure has increased due to continuous labor shortage.
“Increased input costs and inflation of selling prices have been extensive overall throughout products and services,” said Williamson. “If these pressure continues, there is a possibility that there is a possibility that the FRB may take a more hawk -like attitude depending on the solid economic growth and the solid employment market.”
Demand is different
Demand situations show signs of divergence between sector. New orders in the manufacturing industry were recorded for the first time in seven months, but export orders were still low. The service division has continued to expand, although it was a low pace since April last year due to the slowdown in the activities of some companies due to bad weather and dollar increase.
The recovery of the manufacturing industry and the growing optimistic perspective reflect the new possibilities of the US economy. However, the rise in inflation and the possibility of the confusion of the supply chain have been presented to further deteriorate due to tariff policies and the uncertainty of the world economy, which may suppress growth.
“The Trump administration's ability to balance growth and inflation is extremely important in forming the track of economic recovery,” said Williamson.
