US Manufacturing Contracts Third Month with ISM Index at 48.5

U.S. manufacturing activity showed mixed signals in May 2025, with the Institute for Supply Management (ISM) manufacturing PMI falling to 48.5, indicating contraction for the third consecutive month and missing forecasts. Key ISM indexes such as new orders, production, and employment remained in contraction territory, while supplier deliveries and prices paid remained elevated. Contrastingly, the S&P Global manufacturing PMI rose to 52.0, signaling expansion driven largely by increased inventory stockpiling amid concerns over tariffs and supply disruptions. This divergence highlights underlying uncertainty in the sector, as firms face sluggish demand yet simultaneously prepare for potential price increases and supply chain challenges. Expert analysis points to a temporary surge in demand masking deeper weaknesses, with ongoing inflationary pressures and export orders declining sharply. Overall, the data reflect a manufacturing sector grappling with conflicting trends amid broader economic concerns.