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PMIs Point to Uneven Start to 2026 as Japan Levels Off, China’s Services Cool, and U.S. Factories Shrink

Rising costs alongside uneven hiring highlight fragile demand into 2026.

Overview

  • Japan’s manufacturing PMI rose to 50.0 in December, halting a five‑month slide as firms reported softer order declines, faster input‑cost inflation, and a 13th straight month of hiring.
  • China’s private services PMI eased to 52.0, a six‑month low, with new export business slipping back into contraction on weaker tourism and staffing cut for a fifth month even as confidence hit a nine‑month high.
  • China’s official manufacturing PMI edged up to 50.1, signaling a marginal return to growth that surveys linked to holiday‑related orders and promotions, with private manufacturing readings showing similarly slight expansion.
  • U.S. manufacturing contracted for a 10th month as ISM’s PMI fell to 47.9, with employment down again and prices paid holding at an elevated 58.5, though low customer inventories pointed to potential order rebuilding.
  • Across surveys, firms flagged accelerating input costs and divergent labor trends, yet sentiment remained cautiously above long‑run averages on hopes for new projects and gradual improvement in 2026.