US Manufacturing Outlook Brightens Under Trump Presidency
S&P Global's manufacturing PMI has risen to 50.1 in January, indicating expansion in the sector. This increase marks a seven-month high and suggests optimism among US manufacturers.
The manufacturing output index has also improved, climbing to 50.2 in January from 47.7 in December.
"US businesses are entering 2025 with positivity, anticipating the new administration's efforts to boost economic growth," said Chris Williamson, chief business economist at S&P Global Market Intelligence. "The manufacturing sector exhibits the most significant optimism, expecting accelerated growth from Trump's policies."
While S&P Global's composite PMI, encompassing both manufacturing and services, declined slightly to 52.4 in January, this was primarily due to reduced activity in services. Williamson remains optimistic, citing sustained business confidence.
The rise in hiring, with jobs created at the highest rate in over two years, further encourages the positive outlook.
Equity strategists monitor manufacturing PMI data, including S&P Global's report and the Institute for Supply Management's measure, as potential indicators of future earnings growth. Fundstrat researcher Tom Lee predicts the ISM manufacturing number, due on February 3, could surpass 50 for the first time in 26 months, signaling a surge in earnings growth.