US ISM Manufacturing PMI jumped sharply from 47.9 to 52.6 in January, far above expectations of 48.3 and marking the first return to expansion since February 2025. The scale of the rebound points to a clear improvement in factory momentum rather than a marginal stabilization.
The details were notably strong. Production rose from 50.7 to 55.9, the highest level since February 2022. New orders surged from 47.4 to 57.1, expanding for the first time since August. Employment also improved, with the index rising from 44.8 to 48.1, though it remains in contraction territory. Price pressures edged higher but stayed contained, with the prices index ticking up from 58.5 to 59.0.
Based on the historical relationship tracked by the Institute for Supply Management, the January PMI reading is consistent with real GDP growth of around 1.7% annualized, reinforcing the view that US growth momentum has firmed at the start of the year.
