Prior was 52.5Prices paid 78.3 vs 73.0 expected (Prior was 70.5)Employment 48.7 vs 48.8 priorNew orders 53.5 vs 55.8 priorThis prices paid number is worrisome but not surprising.US manufacturing spent most of 2025 in contraction. The ISM PMI slipped to 47.9 in December 2025, its lowest level since October 2024 and the third consecutive monthly decline. Production and inventories pulled back, and employment continued to contract, though modest improvements in new orders and backlogs offered faint encouragement. Price pressures remained elevated, with the prices paid subindex holding at 58.5.January 2026 delivered a dramatic reversal. The PMI surged to 52.6, far above the 48.5 consensus, marking the first expansion in twelve months and the strongest reading since 2022. New orders jumped nearly ten points to 57.1 and production rose to 55.9, though ISM cautioned that some of the rebound reflected post-holiday restocking and preemptive buying ahead of anticipated tariff-related price increases.February moderated slightly to 52.4 but still beat expectations of 51.8, confirming a second consecutive month of expansion. New orders and production growth slowed but remained solid. Employment and inventories stayed in contraction territory. The most notable development was a sharp acceleration in input prices—the prices paid subindex surged to 70.5, the highest since June 2022—driven by steel, aluminum, and tariff-related cost pressures. The ISM Manufacturing PMI is published monthly by the Institute for Supply Management, based on survey responses from purchasing and supply executives at over 400 industrial companies across 18 U.S. industries. Unlike the S&P Global PMI, which covers only private firms, the ISM draws from the broader NAICS classification system and is one of the oldest and most widely followed leading indicators of U.S. economic health. The headline PMI is a composite of five diffusion indices—new orders (30%), production (25%), employment (20%), supplier deliveries (15%), and inventories (10%)—with readings above 50 indicating expansion. This article was written by Adam Button at investinglive.com.