The ISM manufacturing PMI for September inched as much as 49.1 from 48.7 in August, barely beating the 49.0 consensus however remaining in contraction territory for the seventh consecutive month.

Whereas the headline confirmed marginal enchancment, underlying elements painted a regarding image of deteriorating demand.

Key Takeaways from the September ISM Manufacturing Report

• Manufacturing contraction persists: The index rose to 49.1 from 48.7, marking the seventh straight month beneath 50
• Demand situations worsened: New orders fell again into contraction at 48.9 (from 51.4), reversing August’s temporary enlargement
• Employment remained weak: The employment index improved barely to 45.3 from 43.8, however stayed deeply in contraction
• Tariff affect intensifies: Costs remained elevated at 61.9, with firms reporting tariffs are “killing” their companies

Hyperlink to official ISM Manufacturing PMI (September 2025)

The report revealed widespread manufacturing misery. Solely 5 of 18 industries reported development in September, down from seven in August.

Regardless of the modest headline enchancment, the small print revealed important weak point. New orders contracted after one month of development, falling 2.5 factors to 48.9. Export orders plunged to 43.0 from 47.6, reflecting continued commerce tensions.

Survey respondents described situations as “severely depressed,” with one transportation gear govt stating they imagine the sector is in a “stagflation interval the place costs are up however orders are down resulting from tariff coverage.”

Significantly regarding was the revelation that tariffs are inflicting operational disruptions past simply value will increase – supplies are being held up at borders resulting from documentation points, and clients are refusing to pay greater costs, resulting in collapsed order books.

Market Reactions

U.S. Greenback vs. Main Currencies: 5-min

Overlay of USD vs. Main Currencies Chart by TradingView

With the U.S. authorities shutdown limiting different information releases, this report carried further weight for Fed expectations, reinforcing the case for continued easing with manufacturing nonetheless weak.

The greenback, which had already been pressured by the smooth ADP payrolls report, bounced from its intraday lows after the ISM headline PMI got here in stronger than anticipated.

It went on to erase the remainder of its U.S. session losses, possible helped by some place squaring as merchants braced for volatility from the unsure shutdown timeline.

The greenback eased again across the London shut, however nonetheless completed the day greater towards most majors, aside from the British pound and the New Zealand greenback.