U.S. factory activity experienced growth in January for the first time in a year, with new orders rebounding significantly. According to Jin10, despite this positive development, the manufacturing sector continues to face challenges, as import tariffs have increased raw material costs and strained supply chains. The ISM Manufacturing PMI rose to 52.6 last month, marking the first time in 12 months it has surpassed 50 and reaching its highest level since August 2022, after being in contraction for ten consecutive months. However, the anticipated 'revival' under U.S. President Donald Trump's extensive tariff policies has not yet materialized, with manufacturing jobs decreasing by 68,000 in 2025.
The forward-looking new orders sub-index in the ISM survey jumped to 57.1 last month, the highest since February 2022. The supplier deliveries sub-index increased to 54.4, where a reading above 50 indicates slower delivery speeds, potentially contributing to the PMI's rise. Typically, extended supplier delivery times are associated with a strong economy and robust demand, but they may also reflect tariff-related supply chain bottlenecks. The prices paid sub-index rose from 58.5 in December to 59.0, suggesting that commodity prices have room for further increases, which could continue to drive inflation upward for some time.