The ISM Manufacturing PMI rose by 0.9 points from the previous month to 49.3 in December of 2024, topping market expectations of 48.4. The index reflects the softest pace of contraction in U.S. manufacturing since 50.3 in March. Together, with a positive Dallas Fed index, it points to signs that economic expansion is on the rebound despite a period of higher interest rates.

The gauge of new orders reached 52.5, the strongest level of demand in 11 months. Other highlights include month-over-month upticks in production, prices, and inventories. 

The Dallas Federal Reserve manufacturing index moved into positive territory in December, a first in 2024.

The Conference Board reports that the US economy ended 2024 with positive momentum, but 2025 concerns linger. The economy should expand at a pace of 2.0% in 2025. US real GDP growth in 2026 should settle at 1.8%. Inflation should stabilize at the Fed’s 2% target in Q4 2025.

The Conference board attributes strong Q4 2024 growth to strong consumer spending despite hurricanes that impacted several states, and robust holiday sales. “Black Friday” and “Cyber Monday” sales reportedly reached record highs and November retail sales were healthy.